c&s paper co., ltd
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C&S Paper Co., Ltd. Semi-annual Report 2021
0
C&S Paper Co., Ltd.
Semi-Annual Report 2021
August 2021
C&S Paper Co., Ltd. Semi-annual Report 2021
1
Section I Important Notice, Contents and Definitions
The Board of Directors and the Board of Supervisors of the Company and its
directors, supervisors and senior management warrant that the information
contained in this semi-annual report is true, accurate and complete without any
false and misleading statements or material omissions, and severally and jointly
accept legal liability thereof.
Liu Peng, the person in charge of the Company, Dong Ye, the person in charge of
accounting of the Company, and Xu Xianjing, the person in charge of the
accounting department of the Company, have declared that they warrant the
truthfulness, accuracy and completeness of the financial statements set out in
this semi-annual report.
All directors of the Company attended the Board meeting on which this report
was reviewed.
Discrepancies in the sum of decimals in this report are caused by rounding.
The forward-looking statements in this report, including future plans and
development strategies, do not constitute substantive commitments of the
Company to investors. Investors should be aware of the investment risks.
The Company has described potential risk factors and countermeasures that
may exist in its operations in detail in Section III Discussion and Analysis of the
Management and Section X Risks Faced by the Company and Countermeasures.
C&S Paper Co., Ltd. Semi-annual Report 2021
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Investors are advised to pay attention to the relevant contents.
The Company plans not to distribute cash dividend, issue bonus share, or
transfer capital reserve into share capital.
C&S Paper Co., Ltd. Semi-annual Report 2021
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Contents
Section I Important Notice, Contents and Definitions .............................................................................................................................1
Section II Company Profile and Key Financial Indicators ......................................................................................................................6
Section III Discussion and Analysis of the Management .........................................................................................................................9
Section IV Corporate Governance ......................................................................................................................................................... 27
Section V Environmental and Social Responsibilities ........................................................................................................................... 31
Section VI Significant Events ................................................................................................................................................................ 40
Section VII Changes in Shareholding and Information of Shareholders ............................................................................................... 60
Section VIII Particulars of Preference Shares ........................................................................................................................................ 69
Section IX Corporate Bonds .................................................................................................................................................................. 70
Section X Financial Report .................................................................................................................................................................... 71
C&S Paper Co., Ltd. Semi-annual Report 2021
4
Documents Available for Inspection
1. The Semi-annual Report 2021 affixed with the signature of Mr. Liu Peng, the
Company’s legal representative
2. Financial statements affixed with the signatures and stamps of Mr. Liu Peng, the
legal representative of the Company, Mr. Dong Ye, person in charge of accounting,
and Ms. Xu Xianjing, person in charge of accounting department of the Company
3. All original copies of the Company’s documents and the original drafts of the
Company’s announcements as disclosed in the newspaper designated by the CSRC
during the reporting period
4. Place for document inspection: Office of the Board of Directors
C&S Paper Co., Ltd. Semi-annual Report 2021
5
Definitions
Term Definition
The Company, Company, C&S C&S Paper Co., Ltd.
Zhongshun Group Guangdong Zhongshun Paper Group Co., Ltd.
Chung Shun Co. Chung Shun Co., a Hong Kong-based company
Zhongshan Trading Zhongshan Zhongshun Trading Co., Ltd.
Zhong Shun International Zhong Shun International Co., Ltd., a Hong Kong-based company
C&S Hong Kong C&S Hong Kong Co., Ltd., a Hong Kong-based company
Beijing Trading Beijing C&S Paper Co., Ltd.
Xiaogan Trading Xiaogan C&S Trading Co., Ltd.
Chengdu Trading Chengdu Zhongshun Paper Co., Ltd.
Hangzhou Trading Hangzhou Jie Rou Trading Co., Ltd.
Shanghai Trading Shanghai Huicong Paper Co., Ltd.
Sichuan C&S C&S (Sichuan) Paper Co., Ltd., formerly known as Chengdu Tiantian
Paper Co., Ltd.
Jiangmen C&S Jiangmen Zhongshun Paper Co., Ltd.
Zhejiang C&S Zhejiang Zhongshun Paper Co., Ltd.
Hubei C&S C&S (Hubei) Paper Co., Ltd., formerly known as Hubei Zhongshun
Hongchang Paper Co., Ltd.
Yunfu C&S C&S (Yunfu) Paper Co., Ltd.
Yunfu Trading Yunfu Hengtai Trading Co., Ltd., formerly known as C&S (Yunfu)
Trading Co., Ltd.
Tangshan C&S, Tangshan subsidiary C&S Paper Co., Ltd. Tangshan Branch
Zhongshan Paper C&S (Zhongshan) Paper Co., Ltd., formerly known as Zhongshan Tongfu
Trade Co., Ltd.
Macao C&S C&S (Macao) Co., Ltd.
Dazhou C&S C&S (Dazhou) Paper Co., Ltd.
Sun C&S Sun Daily Necessities Co., Ltd.
Dolemi Dolemi Sanitary Products Co., Ltd.
Jiangsu C&S C&S (Jiangsu) Paper Co., Ltd.
Yunnan Dolemi Yunnan Dolemi Trading Co., Ltd.
Luzhou Dolemi Luzhou Dolemi Sanitary Products Co., Ltd.
Mianyang Dolemi Mianyang Dolemi Sanitary Products Co., Ltd.
Mazars Mazars CPA Limited (LLP)
C&S Paper Co., Ltd. Semi-annual Report 2021
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Section II Company Profile and Key Financial Indicators
I. Company Profile
Stock name C&S Stock code 002511
Stock exchange on which the
shares are listed Shenzhen Stock Exchange
Chinese name of the Company 中顺洁柔纸业股份有限公司
Abbreviation of Chinese name of
the Company (if any) 中顺洁柔
English name of the Company (if
any) C&S Paper Co., Ltd.
Abbreviation of English name of
the company (if any) C&S
Legal representative of the
Company Liu Peng
II. Contact Persons and Contact Methods
Sectary to the Board Representative of securities affairs
Name Zhang Haijun Liang Yao
Address No. 136 Caihong Avenue, West District,
Zhongshan City
No. 136 Caihong Avenue, West District,
Zhongshan City
Tel 0760-87883333 0760-87883333
Fax 0760-23886886 0760-23886886
Email Zhhaijun003@163.com dsh@zsjr.com
III. Other Information
1. Contact information of the Company
Whether there are changes in the Company’s registered address, office address and postal code, website, and email
address during the reporting period
√ Applicable □ Not applicable
Registered address No. 1 Longcheng Road, Dongsheng Town, Zhongshan City
Postal code of registered address 528414
Office address No. 136 Caihong Avenue, West District, Zhongshan City
Postal code of office address 528401
Company website https://www.zsjr.com/
Email dsh@zsjr.com
Disclosure date on the website on which the
temporary announcements are publicized (if
any)
April 29, 2021
C&S Paper Co., Ltd. Semi-annual Report 2021
7
Search index on the website on which the
temporary announcements are publicized (if
any)
Announcement on Resolutions of the 4th Meeting of the Fifth Session of the
Board of Directors, Articles of Association of the Company (April 2021); for
details, please refer to http://www.cninfo.com.cn
2. Information disclosure and location for inspection of documents
Where there are changes in information disclosure and location for inspection of documents during the reporting
period
□ Applicable √ Not applicable
There are no changes in the name of the newspaper selected by the Company for information disclosure, website
designated by CSRC for publicizing the semi-annual report, and the location for inspection of the semi-annual
report during the reporting period. Please refer to the Annual Report 2020 for details.
IV. Main Accounting Data and Financial Indicators
Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous
years
□ Yes √ No
Current period Same period of previous
year
Changes over same period of
previous year
Operating income (RMB) 4,247,641,836.38 3,616,201,399.80 17.46%
Net profit attributable to shareholders of
the listed company (RMB) 407,161,317.15 452,699,484.61 -10.06%
Net profit attributable to shareholders of
the listed company after deducting non-
recurring profit and loss (RMB)
398,988,234.69 446,535,737.96 -10.65%
Net cash flow from operating activities
(RMB) 737,865,788.19 504,558,588.33 46.24%
Basic earnings per share (RMB/share) 0.3140 0.3519 -10.77%
Diluted earnings per share (RMB/share) 0.3109 0.3462 -10.20%
Weighted average return on net assets 7.98% 10.46% -2.48%
End of current period End of previous year Changes over end of previous
year
Total assets (RMB) 7,138,935,102.92 7,478,439,747.77 -4.54%
Net assets attributable to shareholders of
the listed company (RMB) 4,851,858,577.42 5,042,146,076.42 -3.77%
C&S Paper Co., Ltd. Semi-annual Report 2021
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V. Difference in Accounting Data under Domestic and International Accounting Standards
1. Net profit and net asset differences under International Financial Reporting Standards (IFRS) and
Chinese Accounting Standards (CAS)
□ Applicable √ Not applicable
No such differences for the reporting period
2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting
Standards (CAS)
□ Applicable √ Not applicable
No such differences for the reporting period
VI. Non-recurring Items and Amounts
√ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profits/losses from the disposal of non-current asset (including
the write-off that accrued for impairment of assets) -887,044.27
Governmental grants reckoned into current profits/losses (not
including grants enjoyed in quota or ration according to national
standards, which are closely relevant to the company’s business)
10,556,600.31
Profits/losses from assets entrusted to others for investment or
management 358,473.15
Returns on principal-protected
wealth management products at
maturity and reverse repo of
treasury bonds
Other non-operating income and expenses except for the
aforementioned items -187,907.30
Less: Influence of income tax 1,667,039.43
Total 8,173,082.46 --
Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.
1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—
Non-recurring Profit and Loss as recurring profit and loss items.
□ Applicable √ Not applicable
The Company did not define any non-recurring profit and loss items defined or listed in the No. 1 Explanatory
Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit
and Loss as recurring profit and loss items during the reporting period.
C&S Paper Co., Ltd. Semi-annual Report 2021
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Section III Discussion and Analysis of the Management
I. Principal Businesses of the Company during the Reporting Period
Mr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1978. Starting from
intensive paper processing, the Company has developed into a leading household paper enterprise integrating
R&D, production and sales after forty-three years of striving. With an adherence to its corporate values of
“products need brands, enterprises need brands, and people need brands”, the Company has extended its products
from household paper to cross-category household daily necessities including cotton series products, sanitary
wipes, baby diapers, etc.
Currently, the Company features three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include
paper rolls, coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton
tissues, etc. Product series involve Face series, Lotion series, Natural Wood series, Antibacterial Paper series, Jin
Zun series, wipes, Sun series, Dolemi series, OKBEBE series, and Cotton Tissue series. Specifics are given in the
following:
1. Household paper (Jie Rou brand + Sun brand)
Face Series: Face wettable facial tissue is a feature product of the Company. Through constant quality upgrading,
the newly developed four-layer thick facial tissues remain pliable and thick even when they are wet. One piece of
this facial tissue is as thick as two pieces of average tissues, which optimizes the products’ user experience and
fashion sense. In 2020, in order to better reflect the brand’s image and high-end style, the Company incorporated
oil painting elements into its packaging and launched Face oil painting series products, which is called the
“artwork of paper tissues”.
Lotion Series: Lotion water retention facial tissues are characterized by the skin-friendly lotion and moisturizing
factor. They feel soft and smooth, thanks to the water retention factors. This product is especially suitable for
delicate skin and applicable to mothers and infants, people with nasal allergy, and people wearing makeup.
Natural Wood Series: The Company launched the first noble yellow tissues (with low whiteness), “Jie Rou
Natural Wood Series” in 2017, based on the consumption concepts of health and safety. Its soft and pliable texture
is attributable to 100% imported raw wood pulp. Quality of the whole series is superb.
Antibacterial Series: With the advent of the post-pandemic era in China, the Company introduced the antibacterial
C&S Paper Co., Ltd. Semi-annual Report 2021
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series products in early 2021 in line with changes in consumption habits of consumers. The products contain
antibacterial factors and have been proved with experiments to effectively reduce the growth of more than 99% of
bacteria on paper tissues. They can effectively inhibit bacteria such as E. coli and staphylococcus aureus, thereby
protecting the health of consumers.
Jin Zun Series: Made from 100% imported raw wood pulp, Jin Zun products are thick, pliable, and cost-effective.
Wipes: Wipe products of the Company are diversified, including mother and baby wipes, disinfection wipes,
personal care wipes, kitchen wipes, and pure water wipes, which can meet the needs of consumers in different
scenarios.
Sun Series: The Company launched the new brand Sun in 2019 in conjunction with the 300,000-ton bamboo-pulp-
paper integration project in order to accelerate the coverage of high-, mid- and low-end household paper markets
in China and satisfy consumption needs at different levels. This initiated the Company’s “dual brand” business
strategy. Sun is positioned to be a highly cost-effective product that has good quality yet lower prices. It is the key
to raise the market share of the Company in the future.
2. Personal care products (Dolemi brand)
Dolemi Series: In 2019, the Company launched a new personal care brand, Dolemi, to cater for upgrading
consumption. The surface of Dolemi pads is made from natural cotton. The products feature two-way air
circulation and are elastic, soft, and fit. Thanks to the good air circulation, consumers will feel at ease. They
enable women pursuing better quality of life to experience “thin pads and get rid of side leakage”.
OKBEBE Series: This care brand for newborn babies was rolled out in early 2021. Products include baby diapers
and pull-up pants. With medical level high standards, the products are skin-friendly, breathable, dry and easy to
absorb. They are dedicated to providing babies with safer and more comfortable growth experience, having passed
the surveillance on six product performance indicators including allergenic microbial inspection and production
environment bacteria.
3. Quality health products
Cotton Tissue Series: In 2018, the Company stepped out of the household paper field and introduced the “Cotton
Tissue“ products. The products feature 100% fresh cotton, complete physical processes, and unbleached. As being
natural, healthy, soft, skin-friendly, and dry-wet dual use, they can be used for personal cleaning and care as cotton
pads and face towels, especially by infants and women.
Medical surgical masks: In response to the government’s call, the Company quickly initiated medical mask
production and rolled out medical surgical mask products. The products are characterized by “high efficiency
C&S Paper Co., Ltd. Semi-annual Report 2021
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filtration, low breathing resistance, and comfortable wearing”, and have passed the EU CE and US FDA
certifications. Third-party laboratory testing from US, EU and Japan proves the products to have reached the
highest quality standards of their kind.
Other quality health products: In line with the Company’s strategic planning and market needs, the Company
successively launched personalized products that are fit with consumer needs since 2020, including makeup
removal wipes, feminine care wipes, alcohol disinfectant wipes, mouthwashes, disinfectant hand sanitizers, face
wash towels, disposable sweat-absorbent wipes, insoles, etc. This enables the Company to form a diversified
development pattern on the basis of pursuing high quality and individualization.
Currently, the competition in China’s household paper industry is still fierce and industry concentration is
increasing. With strengthened awareness on the concept of healthy living, consumers pay increasing attention to
brands. Product quality is still a prominent concern in the industry. Amid all these, the Company has become one
of the representative brands of high-end household paper in the market through continuous brand building and
quality assurance, and robust production capacity layout and channel expansion. It is ranked among the first
echelon in the household paper industry and is well recognized by consumers and capital markets. In addition,
with an adherence to the value concept of “Only Care About You”, the Company continues to tap consumer needs
and constantly upgrades and optimizes products with leverage on its strong R&D and innovation capabilities. The
Company is committed to providing consumers with products of better quality, more comfort, and more tailored to
their individual needs. The Company aims to achieve national product coverage which is underpinned by
continuously improved product reputation among consumes and strengthened and consolidated brand awareness.
II. Analysis of Core Competitiveness
1. Belonging to the first echelon of the domestic household paper industry
The Company is a top-performing enterprise in the first echelon of the domestic household paper industry. Its
products are sold at home and abroad including Southeast Asia, the Middle East, Europe and United States.
2. Constantly optimized product structure
The Company boasts three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include paper rolls,
coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton tissues, etc.
The Company continuously optimizes its product structure and raises the sales proportion of high-end products,
high-gross profit products and non-roll categories. In addition, it has strengthened the sales of major series like
Face, Lotion, and Natural Wood, formulated distribution standards for each major channel, raised the market share
C&S Paper Co., Ltd. Semi-annual Report 2021
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in each channel, and continuously improved the gross profit and profitability of products.
3. Stable and effective management team
The R&D, production, procurement, sales, quality control, and operation teams have successively introduced
excellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production and
sales teams in the industry, and has gradually established the professional manager management system. Excellent
and professional management teams have effectively reinforced and improved the Company’s new product R&D,
product quality and marketing management. The management team of the Company has formulated long-term and
strategic plans in line with actual situation of the Company, industry development level, and market demands.
Moreover, the management team is capable of making reasonable decisions on operation management issues with
relation to R&D, production, marketing, investment, and financing, and effectively implementing such decisions.
The excellent management team fundamentally guarantees the Company’s competitiveness and sustainable
development in the future.
4. Nationwide marketing network
The Company has been building and improving its marketing networks based on its keen and strategic insights
and reasonable layout. The Company has enhanced its profitability by expanding its channels from a single dealer
channel in 2015 to six channels at present, namely, GT (general trade channels), KA (key account channels), AFH
(away from home channels), EC (e-commerce channels), RC (new retail channels), and SC (maternal and infant
channels). Its current marketing network covers most of the prefecture-level (and county-level) cities. Products are
directly sold to counties and then distributed to towns. This helps achieve segmented and flat market operation
and expand the dealer network.
Furthermore, while ensuring the smooth operation of other channels, the Company has established a professional
e-commerce operation team, devoted more resources to e-commerce platforms, built and improved the
corresponding supply chain system, and intensified its routine operation management. At present, it has reached
cooperation with renowned platforms such as Tmall, JD, and Pinduoduo. In addition, it has developed an AFH
service team for AFH channels and customer bases to match the growing AFH market. Attributable to a robust
sales network plus quality and diversified products, the Company is able to constantly consolidate its market basis,
improve consumer experience, and enhance brand reputation, which can help achieve sustainable and stable
growth in the future.
5. Nationwide layout of production bases
The Company has developed a production layout covering East China, South China, West China, North China,
C&S Paper Co., Ltd. Semi-annual Report 2021
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and Central China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S,
Hubei C&S, and Tangshan Branch. Thanks to the nationwide layout of production bases, the Company has
narrowed the distance to customers, reduced transportation costs, and enhanced transportation efficiency.
6. Product quality at an international level
The Company has always regarded product quality as its lifeline of survival and development ever since its
incorporation. First-class quality derives from first-class raw materials. Raw materials of the Company have
passed the ISO quality management system certification. Besides strict feed inspection procedures, it has
introduced HACCP food hygiene and safety management system to control the hygiene and quality of products
from the source. Moreover, its products have passed ISO9001 quality management system certification which is
the strictest detecting system for product quality. The Company has observed internationally-advanced quality
management system standards and utilized advanced processes, formulas, and control procedures in production to
ensure each technical performance indicator.
7. Good R&D capabilities
The Company is equipped with a complete product development system and the subordinate R&D department
boasts strong independent R&D capabilities and excellent product formula technologies. In recent years, the
Company has continuously upgraded and optimized its products, in a bid to provide consumers with products of
better quality, more comfort, and more aligned with their individual needs. Products of the Company have
extended from household paper to cross-category household daily necessities including cotton series products,
sanitary wipes, baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of the
industry.
8. First-class production equipment
The Company drives development via technology and has introduced cutting-edge papermaking and processing
equipment. Advanced technology and highly automatic equipment have strengthened the Company’s efficiency,
further satisfied the ever-growing market demands, and served as an unstoppable driving force to development.
9. Outstanding environmental protection awareness and technology
Along with the deepening of industrialization, the concept of environmental protection has been deeply rooted
among the people. The Company has adhered to the concept of “seeking green benefits and fulfilling corporate
social responsibilities”, and utilized advanced environmental protection technologies to pursue its objective of
environmental protection. Its waste water and gas emissions are superior to the national standards and industry-
leading.
C&S Paper Co., Ltd. Semi-annual Report 2021
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III. Analysis of Principal Businesses
Please refer to relevant contents in “I. Principal Businesses of the Company during the Reporting Period”.
YoY changes in major financial data
Unit: RMB
Current period Same period of
previous year YoY changes Reason of change
Operating income 4,247,641,836.38 3,616,201,399.80 17.46%
Operating cost 2,562,244,166.21 1,931,406,918.16 32.66%
An increase of RMB630,837,248.05 or
32.66% was recorded in the reporting
period over the same period of 2020,
mainly owing to 1) increase in operating
income; and 2) adjusting transportation
expenses of the selling expenses to
operating cost as per the New Revenue
Standards during the reporting period.
Selling expenses 915,478,651.72 848,071,082.60 7.95%
Administrative
expenses 165,200,078.38 185,701,854.01 -11.04%
Finance expenses -1,803,144.04 -1,022,002.23 -76.43%
A reduction of RMB781,141.81 or
76.43% was witnessed in the reporting
period compared with the same period of
2020, mainly due to the increase in bank
interest income during the reporting
period..
Income tax
expenses 81,099,520.72 85,783,253.92 -5.46%
R&D investment 97,414,812.32 90,860,828.24 7.21%
Net cash flow
from operating
activities
737,865,788.19 504,558,588.33 46.24%
Net cash flow from operating activities:
This item recorded an increase of
RMB233,307,199.86 or 46.24% in the
reporting period compared with the same
period of 2020, mainly due to the
increase in sales revenue during the
reporting period.
Net cash flow
from investing
activities
-267,293,095.91 -241,861,919.70 -10.51%
Net cash flow
from financing
activities
-815,627,674.59 -45,815,658.83 -1680.24%
Net cash flow from financing activities:
This item recorded a decrease of
RMB769,812,015.76 or 1680.24% in the
reporting period compared with the same
period of 2020, mainly due to the
decrease in cash received from
borrowings and the payment of
repurchased shares during the reporting
period.
Net increase in
cash and cash
equivalents
-348,809,933.39 220,436,993.67 -258.24%
C&S Paper Co., Ltd. Semi-annual Report 2021
15
Whether there are significant changes in the profit composition or source of profits of the Company during the
reporting period
□ Applicable √ Not applicable
There were no significant changes in the profit composition or source of profits of the Company during the
reporting period.
Composition of operating income
Unit: RMB
Current period Same period of previous year
YoY changes Amount
Proportion in
operating income Amount
Proportion in
operating income
Total operating
income 4,247,641,836.38 100% 3,616,201,399.80 100% 17.46%
By industry
Household paper 4,082,881,792.19 96.12% 3,533,490,254.91 97.71% 15.55%
Personal care 40,295,818.30 0.95% 67,214,587.03 1.86% -40.05%
Others 124,464,225.89 2.93% 15,496,557.86 0.43% 703.17%
By product
Finished products 4,116,080,985.46 96.90% 3,595,014,915.99 99.41% 14.49%
Semi-finished
products 7,096,625.03 0.17% 5,689,925.95 0.16% 24.72%
Others 124,464,225.89 2.93% 15,496,557.86 0.43% 703.17%
By region
Domestic 4,149,892,689.00 97.70% 3,522,252,149.36 97.40% 17.82%
Overseas 97,749,147.38 2.30% 93,949,250.44 2.60% 4.04%
Industries, products, or regions that accounted for over 10% of the Company’s operating income or operating
profit
√ Applicable □ Not applicable
Unit: RMB
Operating income Operating cost Gross profit
margin
YoY changes of
operating income
YoY changes of
operating cost
YoY changes of
operating gross
profit margin
By industry
Household paper 4,082,881,792.19 2,438,970,899.44 40.26% 15.55% 28.26% -5.93%
By product
Finished products 4,116,080,985.46 2,456,914,117.77 40.31% 14.49% 28.40% -6.46%
C&S Paper Co., Ltd. Semi-annual Report 2021
16
By region
Domestic 4,149,892,689.00 2,505,260,432.09 39.63% 17.82% 33.05% -6.91%
Where the statistical standards for the Company’s principal business data were adjusted in the reporting period,
whether principal business data of the Company in the recent period were adjusted as per statistical standards at
the end of the reporting period
□ Applicable √ Not applicable
Reasons for YoY changes of relevant data over 30%
□ Applicable √ Not applicable
IV. Analysis of Non-principal Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount Proportion in total
profit Explanation of reason Is it consistently applied?
Investment income 358,473.15 0.07%
Returns on principal-
protected wealth
management products at
maturity and reverse repo of
treasury bonds
No
Asset impairment -2,753,828.11 -0.56% Provision for impairment of
inventories No
Non-operating
income 1,708,366.54 0.35%
Government grants, income
from fine and compensation,
and others
No
Non-operating
expense 3,638,183.86 0.75%
External donations and
others No
V. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of current period End of previous year
Proportio
n changes Explanation of significant changes
Amount
Proportion
in total
assets
Amount Proportion in
total assets
Monetary funds 788,702,136.99 11.05% 1,125,196,199.
56 15.05% -4.00%
Accounts
receivable 933,313,137.98 13.07%
1,051,423,939.
59 14.06% -0.99%
Inventory 1,624,309,444.82 22.75% 1,661,274,495.
32 22.21% 0.54%
C&S Paper Co., Ltd. Semi-annual Report 2021
17
Investment
property 33,856,923.84 0.47% 34,575,365.94 0.46% 0.01%
Fixed assets 3,182,792,165.52 44.58% 2,792,587,302.
21 37.34% 7.24%
Construction
work in
progress
55,534,528.69 0.78% 275,904,617.95 3.69% -2.91%
Construction work in progress: This
item recorded a decrease of
RMB220,370,089.26 or 79.87% in the
reporting period compared with the end
of 2020, mainly owing to the fact that
certain construction work in progress
reached the usable state and were
thereby transferred to fixed assets
during the reporting period.
Right-of-use
assets 11,151,372.57 0.16% 0.16%
Right-of-use assets: This item recorded
an increase of RMB11,151,372.57 or
100.00% in the reporting period
compared with the end of 2020, mainly
owing to the fact that leased assets
were confirmed as right-of-use assets
upon the adoption of the new lease
standards during the reporting period.
Short-term
borrowing 142,942,941.34 1.91% -1.91%
Short-term borrowing: This item
recorded a decrease of
RMB142,942,941.34 or 100.00% in the
reporting period compared with the end
of 2020, mainly owing to the decrease
in short-term loans from banks during
the reporting period.
Contract
liabilities 103,501,369.49 1.45% 137,333,617.40 1.84% -0.39%
Lease liabilities 5,526,106.56 0.08% 0.08%
Lease liabilities: This item recorded an
increase of RMB5,526,106.56 or
100.00% in the reporting period
compared with the end of 2020, mainly
owing to the confirmation of lease
liabilities upon the adoption of the new
lease standards during the reporting
period.
2. Main overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
4. Restriction of asset rights as at the end of the reporting period
Item Book value at the end of the period (RMB) Reason for restriction
Monetary funds 87,477,934.66 Security deposits for issuing letter of credit and
C&S Paper Co., Ltd. Semi-annual Report 2021
18
notes
Total 87,477,934.66
VI. Analysis of Investment
1. Overview
√ Applicable □ Not applicable
Investment amount during the reporting
period (RMB)
Investment amount of previous year
(RMB) Changes
328,193,755.53 401,314,982.57 -18.22%
2. Major equity investment during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Security investment
□ Applicable √ Not applicable
The Company did not invest in securities during the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company did not invest in derivatives during the reporting period.
VII. Major Asset and Equity Sales
1. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell major assets during the reporting period.
C&S Paper Co., Ltd. Semi-annual Report 2021
19
2. Sales of major equity
□ Applicable √ Not applicable
VIII. Analysis of Main Holding and Joint-stock Companies
√ Applicable □ Not applicable
Description of main subsidiaries and of joint-stock companies which have influence on the Company’s net profit
by over 10%
C&S Paper Co., Ltd. Semi-annual Report 2021
20
Unit: RMB
Company
name Company type Principal businesses Registered capital Total assets Net assets Operating income Operating profit Net profit
Jiangmen
C&S Subsidiary
R&D, production, and sales (including
online sales): household paper, maternal
and infant products, cosmetics, wipes,
non-woven products, daily necessities,
and cleaning supplies; sales (including
online sales) of Class I and II medical
devices. (The above items do not involve
special management measures for the
foreign access). (For items that must be
approved in accordance with the law, the
company may carry out business
operations upon approval by competent
departments.)
RMB345,985,031 1,778,554,306.27 1,452,371,161.76 747,241,439.87 115,039,007.95 97,876,239.26
Yunfu C&S Subsidiary
R&D, production, wholesale, retail and
online sales: household paper, sanitary
products, maternal and infant products,
daily necessities, cosmetics, medical
devices, sanitary materials, non-woven
fabrics and products, polymer materials
and products, daily sundries, and
disinfection supplies (excluding
hazardous chemicals); wholesale, retail
and online sales: food; import and export
of goods and technologies (excluding the
import and export of goods and
technologies prohibited by the State or
involving administrative approval);
warehousing services (limited to
warehouses qualified in fire protection
without hazardous chemicals). (For items
that must be approved in accordance with
the law, the company may carry out
business operations upon approval by
RMB650 million 2,126,862,446.83 1,244,184,883.95 1,460,190,589.00 157,532,303.17 133,746,121.37
C&S Paper Co., Ltd. Semi-annual Report 2021
21
competent departments.)
Sichuan C&S Subsidiary
Licensed items: production of sanitary
products and disposable medical supplies;
import and export of goods (for items that
must be approved in accordance with the
law, the company may carry out business
operations upon approval by competent
departments, and the specific business
items are subject to the approval
document or the permit issued by relevant
department). General items: sales of
sanitary products and disposable medical
supplies; sales of personal hygiene
products; sales of daily necessities;
manufacture of paper products; sales of
paper products; manufacture of paper;
manufacture of daily chemical products;
sales of daily chemical products; sales of
Class II medical devices; sales of Class I
medical devices; manufacture of
industrial textile products; sales of
industrial textile products; manufacture of
maternal and infant products; sales of
maternal and infant products. (The
company may carry out business
operations independently according to the
law based on the business license, except
for items that must be licensed according
to the law.)
RMB100 million 1,138,234,120.55 834,215,732.60 964,018,416.58 93,193,559.94 78,591,624.35
Hubei C&S Subsidiary
Licensed items: production of sanitary
products and disposable medical supplies;
production of cosmetics (for items that
must be approved in accordance with the
law, companies may carry out business
operations upon approval by relevant
departments, and the specific business
items are subject to the approval
document or the permit issued by
competent department). General items:
RMB200 million 1,689,435,694.57 444,177,395.36 742,844,886.22 91,690,308.10 69,303,869.68
C&S Paper Co., Ltd. Semi-annual Report 2021
22
sales of sanitary products and disposable
medical supplies; retail of cosmetics;
wholesale of cosmetics; manufacture of
paper; sales of personal hygiene products;
sales of knitwear; manufacture of
maternal and infant products; sales of
maternal and infant products; sales of
paper products; manufacture of paper
products; sales of daily necessities; sales
of daily chemical products; sales of
disinfectants (excluding hazardous
chemicals); Internet sales (excluding the
sales of commodities requiring a permit);
sales of Class I medical devices; sales of
Class II medical devices; import and
export of goods and technologies
(excluding the import and export of goods
and technologies prohibited by the State
or involving administrative approval).
(For items that must be approved in
accordance with the law, the company
may carry out business operations upon
approval by competent departments.)
C&S Paper Co., Ltd. Semi-annual Report 2021
23
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Description of main holding and joint-stock companies
None
IX. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
X. Risks Faced by the Company and Countermeasures
1. Risk of great fluctuations in pulp prices
Pulp is an international bulk raw material and its price is obviously affected by the world economic cycle. Pulp is
the primary raw material of the Company’s production, accounting for 40%-60% of the total production costs.
Therefore, substantial fluctuations in pulp prices pose a risk to the Company.
The Company is equipped with a professional procurement team which, on the premise of ensuring normal
production inventory, adjusts the purchase rhythm by professionally evaluating the future trend of pump boards
and coordinating the market conditions of international pulp prices. The Company has cemented long-term supply
contracts with pulp suppliers that have large production scale, abundant forest resources and advanced production
technologies to ensure stable raw material procurement. It has established a global procurement network with
purchases in Europe, North America, South America, etc.
2. Risk of exchange rate
The import of machinery equipment and pulp and the export of products to overseas market of the Company are
mainly settled in USD, HKD, and EUR. Since exchange rates fluctuate under the impact of the international
economic situation, the Company faces exchange rate risks.
The Company pays close attention to changes in the foreign exchange market on a daily basis and hedges against
exchange losses brought by RMB depreciation or two-way fluctuations by adjusting the structure of foreign
currency assets and liabilities and reducing overall foreign currency liabilities. In addition, the Company started to
adopt the spot selling rate accounting for foreign currency transactions since 2015 in accordance with its actual
needs and in compliance with foreign exchange requirements. In this way, the Company may choose to buy
foreign currency and pay for the goods at a rate favorable to the Company at an appropriate time.
C&S Paper Co., Ltd. Semi-annual Report 2021
24
Furthermore, the Company hedges against and avoids exchange rate risks via centralized management of foreign
exchange funds, purchase payment hedging, etc. based on changes in the foreign exchange market and actual
development of the Company. With regard to exchange rate risk exposure, the Company also uses hedging and
other financial tools to conduct reasonable risk management.
3. Risk of regional market competition
Household paper is a vast market in China in terms of both geography and market space. Given the low unit value,
transportation expenses taking up a large part of the sales price, and limitations of the transportation radius, the
main competition in the household paper industry lies in regional markets. High-end, mid-end, and low-end
products compete in regional markets, with the influence of spending power and consumption habit. Judging from
the development trend of the industry, mid- and high-end household paper of national brands has more
competitive edge. However, at present, some regional brands have an advantage in some regional markets.
Compared with overseas counterparts, China’s household paper industry requires continued integration. The
Company embraces production bases and a sales network across the country and offers mid- and high-end
products under national brands. Nevertheless, it is inescapable from the risk of regional market competition.
After years of development, the Company has become one of the leading companies in the domestic household
paper industry. It has built a marketing network covering most prefecture (county) level cities and a production
base with national presence. As a result, transportation costs can be effectively reduced and transportation
efficiency effectively improved by shorting the distance with consumers. As the Company continues to deepen
and expand sales channels, it will gradually cover untapped outlets. In the future, in response to market
competition, the Company will strengthen channel sinking, increase market penetration, further expand its scale,
and further improve its overall market competitiveness and shares.
4. Risk of industrial policies
Stricter requirements have been raised for the papermaking industry in the aspects of scale, technology, equipment,
and environmental protection, as multiple industry plans and supporting policies have been successively issued by
relevant departments, including the Papermaking Industry Development Policy, the Notice on the Management of
Elevated Source Pollution Discharge Permits in Thermal Power and Papermaking Industries and Pilot Cities of
Beijing-Tianjin-Hebei Region, and the Opinions of China Paper Association on “Thirteenth Five-year”
Development Plan of the Papermaking Industry. Particularly, a number of measures have been introduced through
environmental protection policies to drive the all-round, coordinated, and sustainable development of the
household paper industry, including 1) optimizing the industrial distribution to reasonably allocate resources and
C&S Paper Co., Ltd. Semi-annual Report 2021
25
promoting clean production to preserve the ecological environment; 2) pushing energy conservation and emission
reduction to shut down outdated production facilities, and adjusting product structure and improving product
quality; 3) developing resource-saving models to advocate green consumption; and 4) optimizing enterprise
structure and driving M&A and restructuring. These policies are designated to strengthen household paper
industry concentration, close backward production facilities, and optimize resource allocation. The Company, as
an enterprise in the first echelon of the domestic household paper industry, is underpinned by national policies
related to the sustainable development of the household paper industry. Precisely because of this, industrial policy
adjustment, if any, will impact the production and operations of the Company to some extent.
In the face of increasing stringent environmental protection policies, as a responsible domestic enterprise in the
household paper industry, the Company and its subsidiaries strictly abide by environmental protection laws and
regulations of the state and local governments. Production bases are equipped with state-of-the-art papermaking
equipment, processing equipment and environmental protection treatment equipment and facilities, and adopt
advanced environmental protection technologies. With continuous capital and technological inputs and
improvement in pollution control of the production process, the Company strives to reduce environmental
pollution and ensure green production. The Company will continue to optimize production efficiency in response
to requirements of national industrial policies.
5. Risk of safe production
Most of the materials involved in the household paper industry are flammable, including the main raw material of
pulp, the main packing materials of plastic-film packing bags and cartons, the semi-finished product of body paper,
and finished products. Due to the characteristics of low unit value and large market consumption, household paper
manufacturers have to keep a mass of pulp, packing materials, and semi-finished and finished products from the
entry of raw materials into the plant to the delivery of products to the market. Thus, fire can cause enormous
losses to such manufacturers. In addition, a large number of production lines have been put into use, which may
pose certain occupational health hazard and cause harm to the occupational health of employees. Even though the
overall safe production risk of the Company is controllable, it still faces certain safe production risks.
In view of this, the Company has formulated strict fire management regulations for raw materials and semi-
finished and finished products, established a full-time safety management department, equipped adequate fire
protection equipment in production areas, and bought full insurance for risky properties. As such, the Company’s
fire safety risk is low.
In response to possible occupational health hazards, the Company, at the equipment design and procurement
C&S Paper Co., Ltd. Semi-annual Report 2021
26
stages, requires suppliers to carry out intrinsic safety design and fulfill the protection measures during the
installation process. At the same time, the Company has passed the ISO45001 occupational health and safety
(OHS) management system and continues to maintain its effective operations to reduce the occupational health
and safety risks of employees.
6. Risk of logistics transportation
The spread of the COVID-19 pandemic in 2020 has hindered domestic and foreign logistics transportation by sea
and land to varying degrees, affecting both the Company’s procurement and sales and upstream suppliers and
downstream dealers. In other words, the Company has suffered from multiple dimensions. Though impacts of the
pandemic are phased and temporary, risks are unavoidable for the Company as being at the mid- and downstream
of the household paper industry chain.
The Company has quickly formulated response strategies during the pandemic and actively coordinated supply
chain allocation. In terms of supply, the Company flexibly adjusts supply area based on the optimal principle to
guarantee adequate goods supply to customers. In terms of logistics, the Company implements integrated
management for logistics and warehouses as well as production and sales under the premise of well taking safety
precautions. Personnel in all positions are asked to stick to their posts and maintain close communication with
sales to assure smooth logistics to the greatest extent.
C&S Paper Co., Ltd. Semi-annual Report 2021
27
Section IV Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings Held during the Reporting
Period
1. Shareholder meetings during the reporting period
Session of meeting Type Ratio of investor
participation Date of convening Date of disclosure Resolutions of the meeting
2021 First
Extraordinary
General Meeting
Extraordinary
general meeting
of shareholders
53.68% January 21, 2021 January 22, 2021
Announcement on
Resolutions of 2021 First
Extraordinary General
Meeting of Shareholders
(Announcement No.: 2021-
18). See Securities Times,
Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
2021 Second
Extraordinary
General Meeting
Extraordinary
general meeting
of shareholders
54.85% January 29, 2021 January 30, 2021
Announcement on
Resolutions of 2021 Second
Extraordinary General
Meeting of Shareholders
(Announcement No.: 2021-
26). See Securities Times,
Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
2021 Third
Extraordinary
General Meeting
Extraordinary
general meeting
of shareholders
54.72% April 07, 2021 April 08, 2021
Announcement on
Resolutions of 2021 Third
Extraordinary General
Meeting of Shareholders
(Announcement No.: 2021-
49). See Securities Times,
Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
2020 Annual General
Meeting of
Shareholders
Annual general
meeting 54.78% May 19, 2021 May 20, 2021
Announcement on
Resolutions of 2020 Annual
General Meeting of
Shareholders
(Announcement No.: 2021-
72). See Securities Times,
Securities Daily, China
Securities Journal and
CNINFO
C&S Paper Co., Ltd. Semi-annual Report 2021
28
(www.cninfo.com.cn) for
details.
2021 Fourth
Extraordinary
General Meeting
Extraordinary
general meeting
of shareholders
57.22% June 07, 2021 June 08, 2021
Announcement on
Resolutions of 2021 Fourth
Extraordinary General
Meeting of Shareholders
(Announcement No.: 2021-
89). See Securities Times,
Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders
whose voting rights were resumed
□ Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
√ Applicable □ Not applicable
Name Position Type Date Reason
Zeng Yi Director
Resigned upon
expiry of term of
office
January 21, 2021 Expiry of term of office
Huang Hongyan Independent
Director
Resigned upon
expiry of term of
office
January 21, 2021 Expiry of term of office
Ge Guangrui Independent
Director
Resigned upon
expiry of term of
office
January 21, 2021 Expiry of term of office
He Guoquan Independent
Director Elected January 21, 2021 Elected upon the change of board of directors
Liu Die Independent
Director Elected January 21, 2021 Elected upon the change of board of directors
Yue Yong Director Resigned March 18, 2021 Voluntary resign
Deng Guanbiao President Resigned March 19, 2021 Voluntary resign
Liu Peng President Appointed March 22, 2021 Appointed by the board of directors
Deng Yingzhong Chairman Resigned April 09, 2021 Voluntary resign
Liu Peng Chairman Elected April 12, 2021 Elected by the board of directors
Li Zhaojin Vice President Appointed April 12, 2021 Appointed by the board of directors
Deng Wenxi Vice President Appointed April 27, 2021 Appointed by the board of directors
Dai Zhenji Director, Joint
President Resigned April 28, 2021 Voluntary resign
Li Youquan Supervisor Resigned July 12, 2021 Voluntary resign
Zhang Yang Vice President Appointed July 12, 2021 Appointed by the board of directors
Zhou Qichao Board Secretary, Resigned July 29, 2021 Voluntary resign
C&S Paper Co., Ltd. Semi-annual Report 2021
29
Vice President
Zhang Haijun Vice President,
Board Secretary Appointed August 23,2021 Appointed by the board of directors
III. Profit Distribution and Conversion of Capital Reserve to Share Capital during the
Reporting Period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividend, issue bonus share, or transfer capital reserve into share capital
for the half year.
IV. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and Other
Employee Incentives of the Company
√ Applicable □ Not applicable
1. Implementation of the Phase II stock incentive plan
On May 22, 2021, the Company convened the 5th meeting of the fifth session of the Board of Directors and the
3rd meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on
Achieving the Unlock Conditions of the Second Unlock Period for Restricted Stocks Awarded in the First Grant
under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. There were 499 holders of restricted
stocks meeting the unlock conditions, and the number of stocks that could be unlocked was 4,809,045. The unlock
date of these restricted stocks was June 30, 2021. The above meetings also reviewed and approved the Proposal
on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the
Company’s 2018 Stock Option and Restricted Stock Incentive Plan. The Board of Directors of the Company
approved to repurchase and deregister a total of 2,021,305 restricted shares that had been granted but not unlocked.
In addition, the aforesaid meetings also deliberated and approved the Proposal on Achieving the Exercise
Conditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s
2018 Stock Option and Restricted Stock Incentive Plan. There were 2,274 holders of stock options meeting the
exercise conditions, and the number of options that could be exercised was 2,948,559. The Proposal on the
Repurchase and Deregistration of Partial Stock Options Awarded in the First Grant under the Company’s 2018
Stock Option and Restricted Stock Incentive Plan was also considered and approved. The Board agreed to
deregister 1,294,091 options that had been granted but not exercised.
On May 28, 2021, the Company held the 6th meeting of the fifth session of the Board of Directors and the 4th
C&S Paper Co., Ltd. Semi-annual Report 2021
30
meeting of the fifth session of the Board of Supervisors, which reviewed and approved the Proposal on Adjusting
the Exercise Price of Stock Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan.
Pursuant to the Company’s profit distribution plan in 2020 and relevant provisions of the 2018 Stock Option and
Restricted Stock Incentive Plan (Draft), the Company adjusted the exercise price of first-granted stock options
from RMB8.572/share to RMB8.472/share, and adjusted the exercise price of reserved stock options from
RMB13.965/share to RMB13.865/share.
On July 6, 2021, the cancellation procedures for 1,294,091 first-granted stock options that had been granted but
not exercised were completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited.
Please continue to pay attention to the Company’s information disclosure for subsequent implementation progress
or changes.
2. Implementation of the Phase II employee stock ownership plan
As of January 5, 2021, all stocks held under the Company’s Phase II Employee Stock Ownership Plan, i.e.
11,709,583 shares, had been sold out. As per relevant provisions of the Phase II Employee Stock Ownership Plan,
the implementation of the Plan is completed and thus the Plan is terminated.
3. Implementation of the Phase III employee stock ownership plan
On May 22, 2021, the Company held the 5th meeting of the fifth session of the Board of Directors and the 3rd
meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on Phase
III Employee Stock Ownership Plan (Draft) and Its Summary. In order to improve employee cohesion and
corporate competitiveness and ensure the attainment of the Company’s future development strategies and business
goals, the Company plans to roll out Phase III Employee Stock Ownership Plan; preferred shares and deferred
shares are set at a leverage ratio of 1:1, with a cap of 400 million shares and 200 participants.
On June 7, 2021, the Company convened the 2021 Fourth Extraordinary General Meeting, which considered and
approved proposals relevant to Phase III Employee Stock Ownership Plan. In order to ensure the Plan’s smooth
implementation, the shareholders’ meeting authorized the Board of Directors to fully handle matters relevant to
the Plan.
Please continue to pay attention to the Company’s information disclosure for subsequent implementation progress
or changes.
C&S Paper Co., Ltd. Semi-annual Report 2021
31
Section V Environmental and Social Responsibilities
I. Main Environmental Protection Issues
Whether the listed company and its subsidiaries are the key pollution discharge units published by the
environmental protection department
√ Yes □ No
Name of
company or
subsidiary
Main
pollutants
and
particular pollutants
Ways of
discharge
Number of
discharge
outlets
Distribution
of discharge
outlets
Concentrati
on of
discharge
Implemente
d pollutant
discharge standards
Total
discharge
Total
approved
discharge
Excessive
discharge
Jiangmen
Zhongshun
Paper Co., Ltd.
Waste water
- COD
After
treatment, it
is
discharged
to the
sewage
treatment plant
1
Centralized
processing
facilities in the factory
80mg/L 200mg/L 158.95t 335.6 t/a None
Jiangmen
Zhongshun
Paper Co., Ltd.
Waste water
- Ammonia nitrogen
After
treatment, it
is
discharged
to the
sewage
treatment plant
1
Centralized
processing
facilities in the factory
1.76mg/L 8mg/L 3.497t 13.4 t/a None
C&S
(Sichuan)
Paper Co.,
Ltd.
Waste water
- COD
After
treatment, it
enters the
water
purification
station
through
urban
sewage pipeline
1
Production
waste water
discharge
(DW001)
flows
through the
channel into
the main
outlet
DW002
(confluent
with
domestic
waste water)
48mg/L 80mg/L 19.6168t 96 t/a None
C&S
(Sichuan)
Paper Co., Ltd.
Waste water
- Ammonia nitrogen
After
treatment, it
enters the
water
purification
station
through
urban
sewage pipeline
1
Production
waste water
discharge
(DW001)
flows
through the
channel into
the main
outlet
DW002
(confluent
with
0.203mg/L 8mg/L 0.083t 9.6 t/a None
C&S Paper Co., Ltd. Semi-annual Report 2021
32
domestic
waste
water)
C&S
(Sichuan)
Paper Co.,
Ltd.
Waste gas -
PM
(particulate
matter)
Discharge
directly
through the
flue
3
Three
chimneys
(2# boiler is
the standby
boiler,
monitoring
when being used)
1# boiler
2.5 mg/m³
2# boiler 0
mg/m³ 3#
boiler 2.7 mg/m³
20 mg/Nm3 0.156t / None
C&S
(Sichuan)
Paper Co., Ltd.
Waste gas -
Nitrogen oxide
Discharge
directly
through the flue
3
Three
chimneys
(2# boiler is
the standby
boiler,
monitoring
when being
used)
1# boiler 27
mg/m³
2# boiler 0
mg/m³ 3#
boiler 29 mg/m³
150
mg/Nm3 1.8886t 31.35 t/a None
C&S
(Sichuan)
Paper Co., Ltd.
Waste gas -
Sulfur dioxide
Discharge
directly
through the flue
3
Three
chimneys
(2# boiler is
the standby
boiler,
monitoring
when being used)
0 50 mg/Nm3 0 / None
Zhejiang
Zhongshun
Paper Co., Ltd.
Waste water
- COD
After
treatment, it
is
discharged
to Jiaxing
Industrial
Sewage
Treatment
Plant
through
municipal pipe
1
Centralized
processing
facilities in the factory
37.2mg/L 500mg/L 7.7875t 139.7 t/a None
Zhejiang
Zhongshun
Paper Co., Ltd.
Waste water
- Ammonia
nitrogen
After
treatment, it
is
discharged
to Jiaxing
Industrial
Sewage
Treatment
Plant
through
municipal pipe
1
Centralized
processing
facilities in the factory
0.4529mg/L 35mg/L 0.1t 9.78 t/a None
C&S
(Hubei)
Paper Co., Ltd.
Waste water
- COD
After
treatment, it
is
discharged
to Biquan
Sewage
Treatment
Plant
through
municipal pipe
1
After
centralized
processing
facilities in
the factory,
it is
discharged
to Biquan
Sewage
Treatment Plant
109mg/L 400mg/L 45.25t 152.25 t/a None
C&S
(Hubei)
Waste water
- Ammonia
After
treatment, it 1
After
centralized 6.913mg/L 30mg/L 4.52t 15.25 t/a None
C&S Paper Co., Ltd. Semi-annual Report 2021
33
Paper Co., Ltd.
nitrogen is
discharged
to Biquan
Sewage
Treatment
Plant
through
municipal pipe
processing
facilities in
the factory,
it is
discharged
to Biquan
Sewage
Treatment Plant
C&S
(Hubei)
Paper Co., Ltd.
Waste gas -
PM
(particulate matter)
Dedusting
by bag
filter,
desulfurizati
on by
limestone-
gypsum and
denitration by SNCR
1 One
chimney
13.1
mg/Nm3 30 mg/Nm3 6.95t 28.63 t/a None
C&S
(Hubei)
Paper Co., Ltd.
Waste gas -
Sulfur dioxide
Dedusting
by bag
filter,
desulfurizati
on by
limestone-
gypsum and
denitration by SNCR
1 One
chimney 58 mg/Nm3
200
mg/Nm3 33.79t 203.87 t/a None
C&S
(Hubei)
Paper Co.,
Ltd.
Waste gas -
Nitrogen oxide
Dedusting
by bag
filter,
desulfurizati
on by
limestone-
gypsum and
denitration by SNCR
1 One
chimney
109
mg/Nm3
200
mg/Nm3 52.26t 239.85 t/a None
C&S
(Yunfu)
Paper Co.,
Ltd.
Waste water
- COD
Continuous
discharge 1
Sewage
treatment
station in
the factory
32.16mg/L 80mg/L 35.605t 197.1 t/a None
C&S
(Yunfu)
Paper Co., Ltd.
Waste water
- Ammonia nitrogen
Continuous
discharge 1
Sewage
treatment
station in the factory
1.98mg/L 8mg/L 2.185t 19.76 t/a None
C&S Paper
Co., Ltd.
Tangshan
Branch
Waste water
- COD
After being
treated by
the plant
sewage
treatment
station, it is
discharged
to the
Lvyuan
Sewage
Treatment
Plant in the zone
1
The main
outlet of the
zone
(Lvyuan
Sewage
Treatment Plant)
29.19mg/L 50mg/L 3.76t 16.5 t/a None
C&S Paper
Co., Ltd.
Tangshan
Branch
Waste water
- Ammonia nitrogen
After being
treated by
the plant
sewage
treatment
station, it is
discharged
1
The main
outlet of the
zone
(Lvyuan
Sewage
Treatment Plant)
0.576mg/L 5mg/L 0.078t 1.65 t/a None
C&S Paper Co., Ltd. Semi-annual Report 2021
34
to the
Lvyuan
Sewage
Treatment
Plant in the zone
C&S Paper
Co., Ltd.
Tangshan Branch
Waste gas -
PM
(particulate matter)
Discharge
directly
through the flue
1 One
chimney
2.75
mg/Nm3 5 mg/Nm3 0.22t 2.46 t/a None
C&S Paper
Co., Ltd.
Tangshan Branch
Waste gas -
Nitrogen oxide
Discharge
directly
through the flue
1 One
chimney
19.22
mg/Nm3 30 mg/Nm3 0.705t 18.46 t/a None
C&S Paper
Co., Ltd.
Tangshan
Branch
Waste gas -
Sulfur
dioxide
Discharge
directly
through the
flue
1 One
chimney
ND (not
detected) 10 mg/Nm3 0 6.15 t/a None
Construction and operation of pollution prevention and control facilities
(1) Compliance obligation fulfillment: The Company and its subsidiaries strictly abide by national and local
environmental laws and regulations; all new projects strictly implement the environmental impact assessment
system and “three simultaneous” system; all production activities strictly comply with the Environmental
Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on the Prevention
and Control of Water Pollution, the Law of the People’s Republic of China on the Prevention and Control of
Atmospheric Pollution, the Law of the People’s Republic of China on the Prevention and Control of
Environmental Pollution by Solid Waste and the Action Plan for Prevention and Control of Water Pollution, and
ensure that all pollutant treatment and discharge are in line with the requirements of laws and regulations.
(2) Configuration and operation of water treatment equipment and facilities: Each subsidiary has a complete set of
environmental protection treatment equipment and facilities. The main sewage treatment processes are anaerobic,
aerobic and subsequent deep treatment processes, which can achieve the discharge standards of various sewage
indicators. In addition, each subsidiary is equipped with a recycling water system, in which the reclaimed water
that meets the usage standard is used for re-production to reduce the discharge of sewage as far as possible. The
sewage of Jiangmen, Zhejiang, Hubei and Tangshan companies is discharged after centralized treatment in the
company and treated by the local sewage treatment plants. After centralized treatment in the company, the sewage
of Sichuan Company enters water purification station through urban sewage pipeline; the sewage of Yunfu
Company, after treated by the company’s sewage treatment station and reaching the standard, is discharged in an
organized manner.
C&S Paper Co., Ltd. Semi-annual Report 2021
35
(3) Online monitoring and operation of water treatment facilities: Five subsidiaries in Yunfu, Sichuan, Zhejiang,
Hubei and Tangshan have all installed online sewage monitoring facilities, which are directly supervised by local
environmental protection bureau. For Jiangmen Company, after the centralized treatment within the company, the
sewage is discharged to the sewage plant of the local paper industry base; there is no other sewage outlet and no
online monitoring facilities; third-party agencies have been invited to conduct monitoring each quarter, and the
test data meet all requirements.
(4) Boiler waste gas emission: Sichuan Branch and Tangshan Branch are equipped with natural gas boilers. Hubei
Branch is equipped with a coal-fired boiler, and waste gas is emitted uniformly after desulfurization and
denitrification. Boiler waste gas emission conforms to GB13271-2014 Emission Standard of Air Pollutants for
Boiler.
Environmental impact assessment of construction projects and other administrative permits for environmental
protection
(1) Administrative permits: According to the Measures for the Administration of Pollutant Discharge Permit of the
Ministry of Environmental Protection of the People’s Republic of China, the applications were submitted to the
Environmental Protection Bureau. All the subsidiaries attained the new pollutant discharge permit in 2017, and
completed its renewal and change in May 2020.
(2) Construction projects: the Company has always been strictly in accordance with environmental laws and
regulations to implement the control of construction projects. Environmental impact assessment was carried out
for all construction projects and environmental protection project construction was arranged according to
construction plan, to ensure that the environmental protection facilities and the main project are designed,
constructed and put into use at the same time. At present, all construction projects put into production have
completed environmental impact assessment and acceptance and approval.
Emergency plan for sudden environmental events
(1) Preparation and reporting of emergency plan for sudden environmental events: The Company strictly
implements emergency response rules for sudden environmental events, and, in accordance with the technical
requirements in the Technical Guidelines for Preparation of Emergency Plans for Environmental Pollution
Accidents, employs a professional advisory and guidance organization to formulate the Emergency Plan for
Sudden Environmental Events, which has been reviewed by and filed with the Environmental Protection Bureau.
(2) Emergency response supplies, training and drill: The Company has matched the corresponding emergency
C&S Paper Co., Ltd. Semi-annual Report 2021
36
response supplies according to the requirements of the Emergency Plan for Sudden Environmental Events.
Emergency response measures for hazardous chemicals have been prepared according to environmental protection
requirements, and necessary labor protection supplies and emergency response supplies have been provided in
accordance with safety technical instructions, and checked and updated regularly. The Company regularly carries
out emergency training and drill and suitability assessment of the emergency plan to ensure the effectiveness and
enforceability of the emergency plan.
Environmental self-monitoring program
(1) Self-monitoring ledger: The Company strictly abides by laws and regulations, carries out self-monitoring work
in accordance with environmental protection requirements, establishes environmental management ledger and
data, and constantly improves it.
(2) Waste water monitoring: At present, self-monitoring is a combination of manual monitoring and automatic
monitoring, and qualified units are entrusted to carry out monitoring regularly. Automatic monitoring projects:
main discharge outlet of waste water (COD, ammonia nitrogen, flow rate, PH, total nitrogen); Manual monitoring
projects: COD, BOD, ammonia nitrogen, SS, chroma, PH, total phosphorus and total nitrogen indicators are
monitored daily; for other sewage monitoring items, uncontrolled emissions, solid waste and factory boundary
noise, each subsidiary entrusts qualified units to carry out monitoring work monthly or quarterly according to the
local environmental protection requirements.
(3) Waste gas monitoring: The main testing items are nitrogen oxide, ringelman emittance, sulfur dioxide and soot.
The testing frequency is in compliance with the requirements of regulations.
(4) The self-monitoring data of pollutant discharge and environmental monitoring plans of each subsidiary are
disclosed on the national key pollution source information disclosure website and the provincial key pollution
source information disclosure website.
Administrative penalties due to environmental issues during the reporting period
Name of company or
subsidiary Reason of penalty Violation Penalty result
Impact on
production and
operation of the listed company
Rectification
measures of the Company
None None None None None None
Other environmental information that should be disclosed
None
Other relevant information on environmental protection
C&S Paper Co., Ltd. Semi-annual Report 2021
37
(1) Energy saving and emission reduction
The Company has always adhered to the concept of green and low-carbon development and integrates
environmental protection into corporate development. In the process of production, the Company continuously
modifies equipment and innovates in technologies, with power and steam consumption per ton of paper
decreasing year by year. This could maximize energy saving and emission reduction on the basis of reducing costs,
thereby realizing the win-win of economic and social benefits.
YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021 H1
Item January-June 2021 2020 2019 2018 2017
Standard coal reduction conversed from power
consumption per ton of paper
4 9 7 4 6
Standard coal reduction conversed from steam
consumption per ton of paper
7 16 20 11 20
(2) Carbon emission right trading
China’s first emissions trading scheme (ETS) was launched in Shenzhen on June 18, 2013. Since then, Beijing,
Tianjin, Shanghai, Guangdong, Hubei, Chongqing and other provinces and cities have rolled out pilot projects for
carbon emission trading. Among the seven pilot regions, most of the provinces and cities issue quota to emission
control enterprises free of charge. As a result, the primary market for quota trading adopts the method of
administrative allocation. Wherein, Guangdong, Shenzhen and Hubei issue certain quotas to emission control
enterprises through bidding.
As of December 31, 2020, Jiangmen production base and Yunfu production base have carbon emission quota.
Hubei production base conducted budgeting and opened an account in 2020 and is expected to initiate quota and
accounting in 2021. The provinces where other subsidiaries are located have not yet started to issue carbon
emission quota and accounting.
Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)
Item 2019 2018 2017 2016
Actual emission of Jiangmen
base
13.60 15.30 16.28 15.10
Emission quota of Jiangmen
base
16.46 16.24 16.69 13.81
Actual emission of Yunfu base 20.43 14.86 12.13 /
Emission quota of Yunfu base 23.11 14.68 12.02 /
Note: The actual carbon emissions in 2020 will be announced after the audit agency completes calculation; according to actual
energy control in production, it is expected that the actual emissions of Jiangmen and Yunfu production bases will be below the
quota in 2020.
The actual emission of Jiangmen production base in 2016 was higher than the emission quota. Through
C&S Paper Co., Ltd. Semi-annual Report 2021
38
continuous energy saving and emission reduction measures, the base has continuously reduced power, steam and
pulp consumption in production. As a result, the actual emissions in 2017, 2018 and 2019 were all below the quota.
The actual emission of Yunfu production base in 2017 and 2018 was higher than the emission quota. Through
continuous energy saving and emission reduction measures, the base has continuously reduced power, steam and
pulp consumption in production. As a result, the actual emission in 2019 was below the quota.
The Company will continue to devote itself to energy-saving, emission-reduction and consumption-reduction
actions and implement them simultaneously across the entire group, to fulfill its corporate social responsibilities
for environmental protection.
II. Corporate Social Responsibilities
As a nation enterprise with important social influence and a leading enterprise in the household paper industry, the
Company has actively fulfilled its corporate social responsibilities. Specifics are as follows:
1. In January 2021, Jiangmen C&S organized party members to visit local elderly in need and donated supplies
worth RMB3,200.
2. In February 2021, the Company contributed materials worth more than RMB1 million to front-line pandemic
control personnel in Shijiazhuang, Hebei Province. Hubei C&S donated C&S paper products equivalent to a value
of RMB10,440 to Xiaonan District Fire Rescue Brigade as a way of respect to fire officers.
3. In March 2021, the Company helped international fight against the pandemic by giving 4 million pieces of
medical masks to Russia, Pakistan, Myanmar and other “Belt and Road” countries. Party members of Jiangmen
C&S volunteered in the afforestation activities of Yuqian Village and donated 3,000 saplings and supplies worth
RMB8,200.
4. In April 2021, in joint efforts with Guangzhou Yuexiu District Center for Disease Control and Prevention,
Guangzhou Emergency Broadcast of Guangzhou Traffic Radio FM106.1, and Guangzhou Charity Association, the
Company donated 120,000 anti-pandemic kits (medical surgical masks + sterilization sanitary wipes) to
Guangzhou.
5. In June 2021, Jiangmen C&S organized party members and visited local widows and lonely elderlies before the
Dragon Boat Festival and donated a total of RMB4,182 in supplies. In addition, in order to support the education
development of Shuangshui Town, Jiangmen C&S contributed RMB50,000 to Shuangshui Dr. Huang Kejing
School for the purchase of smart blackboards.
6. During the period from January to June 2021, charitable funds of the Company provided assistance up to
RMB250,000 to employees and people from the society, which helped 21 needy families and individuals.
7. In July 2021, the Company teamed up with several charitable organizations and contributed more than RMB1.6
C&S Paper Co., Ltd. Semi-annual Report 2021
40
Section VI Significant Events
I. Commitments Completed by Actual Controllers, Shareholders, Related parties, Purchasers,
or the Company within the Reporting Period and Commitments Not Fulfilled by the End of
the Reporting Period
√ Applicable □ Not applicable
Cause of
Commitment
Undertaking
Party
Type of
commitment Content of commitment
Time of
commitment
Term of
commitment
Fulfillment
of
commitmen
t
Share reform
commitment
Commitments in the
acquisition report or
the equity change
report
Commitments made
during asset
restructuring
Commitments made
during the initial
public offering or
refinancing
Directors,
supervisors, and
senior
management
Directors, supervisors, and senior
management promise that they
will not transfer more than 25% of
the total shares of the Company
they hold each year during the
term of office. If they leave office
before the expiry of the term of
office, they promise not to transfer
more than 25% of the total shares
of the Company they hold each
year within the term of office and
within six months after the term
of office expires (which is agreed
when they took office). Moreover,
they will not transfer their shares
of the Company within half a year
after they leave office.
November 25,
2010 Long-term
Strictly
observed
Equity incentive
commitments
Liu Jinfeng
They promise not to sell all their
shares (including shares obtained
from exercise and other shares)
within six months after the end of
the exercise of the last stock
options. Besides, they promise to
strictly conform to stock trading-
related laws and regulations.
November 12,
2020
During the
implementat
ion of the
equity
incentive
plan
Strictly
observed
Dong Ye, Ye
Longfang
They promise not to sell all their
shares (including shares obtained
from exercise and other shares)
June 25, 2021
During the
implementat
ion of the
Strictly
observed
C&S Paper Co., Ltd. Semi-annual Report 2021
41
within six months after the end of
the exercise of the last stock
options. Besides, they promise to
strictly conform to stock trading-
related laws and regulations.
equity
incentive
plan
Other commitments
to minority
shareholders
Deng
Yingzhong,
Deng Guanbiao,
Deng Guanjie,
and Guangdong
Zhongshun
Paper Group
Co., Ltd.
They promise not to compete with
the Company in the same
business.
January 1,
2009 Long-term
Strictly
observed
C&S Paper Co.,
Ltd.
Cash dividends shall be
distributed when dividend
conditions are met. The Board of
Directors of the Company shall
comprehensively consider
industry characteristics,
development stage, business
model, profitability, and major
capital spending (if any),
distinguish the following
circumstances, and propose
differentiated cash dividend
policies in compliance with the
procedures stipulated in the
Articles of Association.
August 28,
2014 Long-term
Strictly
observed
C&S Paper Co.,
Ltd.
The 2019 repurchase plan was
terminated due to objective
reasons. The Company will
perform the necessary procedures
and immediately restart the
repurchase work upon the end of
the exercise period.
May 21, 2020
Between the
end of the
repurchase
plan and the
start of the
next
repurchase
plan (the
Company
reviewed
and passed
the share
repurchase
plan on
January 5,
2021, and
will
continue the
share
repurchase
plan)
Strictly
observed
Deng Yingzhong
He promises not to reduce any
shares of the Company he holds
within six months upon the
completion of the share increase
plan, not to engage in insider
trading and short-term trading,
and not to trade shares of the
Company during sensitive
November 04,
2020
Within six
months from
the
completion
of the share
increase
plan
Strictly
observed
C&S Paper Co., Ltd. Semi-annual Report 2021
42
periods.
Deng Yingzhong
For all employees who purchase
C&S Paper stocks (no less than
1,000 shares) between May 10
and May 31, 2021 and hold them
continuously until May 30, 2022
while still serving in the Company
by then, any losses incurred from
the aforesaid stocks will be fully
compensated by Mr. Deng
Yingzhong while any profits
generated will entirely belong to
the employee.
May 07, 2021
May 10,
2021 - June
30, 2022
Strictly
observed
Deng
Yingzhong,
Deng Guanbiao,
Deng Guanjie
They promise not to reduce or
pledge any shares they hold
directly or indirectly in the
Company in any way from May 9,
2021 to May 30, 2022, including
new shares added due to the
transfer of capital reserve into
share capital or distribution of
stock dividends for the
aforementioned shares during the
commitment period. For any
violation of the above
commitment, all the incurred
earnings will belong to the
Company.
May 09, 2021
May 09,
2021 - May
30, 2022
Strictly
observed
Liu Peng, Chen
Haiyuan, Liang
Yongliang, Li
Youquan, Yue
Yong, Zhou
Qichao, Ye
Longfang, Dong
Ye, Li Zhaojin,
and Deng Wenxi
They promise not to reduce or
pledge any shares they hold
directly or indirectly in the
Company from the date when the
Letter of Commitment is signed
(i.e. May 14, 2021) to December
31, 2021, including new shares
added due to the transfer of
capital reserve into share capital
or distribution of stock dividends
for the aforementioned shares
during the commitment period.
For any violation of the above
commitment, all the incurred
earnings will belong to the
Company.
May 14, 2021
May 14,
2021 -
December
31, 2021
Strictly
observed
Zhou Qichao
He promises not to reduce any
shares he or his parents, spouse or
children hold in the Company
directly or indirectly in the
Company in any way within 12
months from the last reduction of
the Company’s shares in 2021 (i.e.
February 5, 2021), including new
shares added due to the transfer of
capital reserve into share capital
or distribution of stock dividends
for the aforementioned shares
during the commitment period.
July 10, 2021
February 05,
2021 -
February 4,
2022
Strictly
observed
C&S Paper Co., Ltd. Semi-annual Report 2021
43
For any violation of the above
commitment, all the incurred
earnings will belong to the
Company.
Whether
commitments are
fulfilled on time
Yes
II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder and Its
Related Parties
□ Applicable √ Not applicable
During the reporting period, the Company did not have any funds appropriated for non-operating purposes by the
controlling shareholder and its related parties.
III. External Guarantee in Violation of Prescribed Procedures
□ Applicable √ Not applicable
During the reporting period, there was no external guarantee in violation of prescribed procedures.
IV. Engagement and Dismissal of Accounting Firm
Whether the Semi-annual Report has been audited
□ Yes √ No
The Semi-annual Report of the Company has not been audited.
V. Explanation by the Board of Directors and the Board of Supervisors of the “Non-standard
Audit Report” for the Reporting Period Issued by the Accounting Firm
□ Applicable √ Not applicable
VI. Explanation by the Board of Directors of the “Non-standard Audit Report” of the
Previous Year
□ Applicable √ Not applicable
VII. Matters relating to Bankruptcy and Restructuring
□ Applicable √ Not applicable
No bankruptcy and restructuring-related matters of the Company happened during the reporting period.
C&S Paper Co., Ltd. Semi-annual Report 2021
44
VIII. Litigations
Material litigations and arbitrations
□ Applicable √ Not applicable
There were no material litigations or arbitrations during the reporting period.
Other litigations
√ Applicable □ Not applicable
Basic information
of the litigation
(arbitration)
Amount
involved
(RMB
10,000)
Whether
projected
liabilities were
incurred
Litigation
(arbitration)
progress
Hearing results
and influences of
the litigation
(arbitration)
Execution of
judgment of the
litigation
(arbitration)
Date of
disclosure
Index of
disclosure
Zhongshan
Trading sued
Shenzhen
Yongxinghua
Trading Co., Ltd.,
Feng, & Liang for
a sales contract
dispute
660.37 No
Both the
first
instance and
the second
instance
ruled that
Zhongshan
Trading
won the
case.
The verdict of
second instance
came into force.
Zhongshan
Trading has
applied for
execution.
Ongoing
Zhongshan
Trading sued
Guangzhou
Yingjing Trade
Co., Ltd. for a
sales contract
dispute
31.36 No
The first
instance
supported
all the
claims by
Zhongshan
Trading.
The verdict of
first instance
came into force.
Zhongshan
Trading has
applied for
execution.
The first round
of execution
ended. No
properties have
been recovered.
Zhongshan
Trading sued
Shaoyang Jiahe
Trading Co., Ltd.
for a sales contract
dispute
33.64 No
The first
instance
supported
all the
claims by
Zhongshan
Trading.
The verdict of
first instance
came into force.
Zhongshan
Trading has
applied for
execution.
The execution
has been
completed. All
the payment has
been recovered.
Zhongshan
Trading sued
Shanghai Tongli
Trading Co., Ltd.
and eight natural
person defendants
including Liu for a
sales contract
dispute
2,932.01 No
Both the
first
instance and
the second
instance
ruled that
Zhongshan
Trading
won the
case.
The verdict of
second instance
came into force.
Zhongshan
Trading has
applied for
execution.
The execution is
in progress.
RMB71,500
was recovered
in June.
Yin sued C&S
Paper for a dispute
over the right to
health
30.25
No (Note:
Whether
projected
liabilities will
be incurred
The first
instance
ruled that
C&S won
the case.
Wait for the
verdict of the first
instance.
Not applicable
C&S Paper Co., Ltd. Semi-annual Report 2021
45
cannot be
determined prior
to the verdict.)
The second
instance
sent the
case back to
the first
instance
court for a
retrial. The
first
instance
retrial has
been
opened.
C&S is
waiting for
the verdict.
Sichuan C&S sued
Xi’an Minsheng
Department Store
Management Co.,
Ltd. for a contract
dispute
5.65 No
The case
was
mediated
and closed
in the first
instance.
Xi’an Minsheng
has not fulfilled
the repayment
obligation in line
with the paper of
civil mediation.
Sichuan C&S has
applied for legal
enforcement.
The first round
of enforcement
ended;
RMB5,000 were
recovered.
Zhongshan
Trading sued
Guangzhou Jv Se
Mai Ke Internet
Service Co., Ltd.
for a sales contract
dispute
28.55 No
The verdict
of first
instance
came into
force.
The verdict of
first instance
came into force.
Zhongshan
Trading has
applied for
execution..
First round of
execution
ended. No fund
was recovered.
Xiaogan C&S sued
Wuhan Xincheng
Tongda Trading
Co., Ltd. for a
sales contract
dispute
525.16 No
The case
was
mediated
and closed
in the first
instance
(with a
mediation
amount of
RMB4,496,
05235).
Xincheng Tongda
has not fulfilled
obligation in line
with the paper of
civil mediation.
Xiaogan C&S has
applied for legal
enforcement..
Ongoing
Sales contract
dispute with Yu 31.08 No
The first
instance has
ruled in
favor of the
company.
Wait for the
verdict to be
served to the
defendant. After
the verdict comes
into force, the
company will
apply for legal
enforcement.
Not applicable
C&S Paper Co., Ltd. Semi-annual Report 2021
46
IX. Penalty and Rectification
□ Applicable √ Not applicable
No penalties and rectifications of the Company occurred during the reporting period.
X. Integrity Records of the Company and its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XI. Material Related Party Transaction
1. Related party transactions relating to daily operations
√ Applicable □ Not applicable
Party of
related
party
transaction
Related
relationship
Type of
related
party
transaction
Content
of
related
party
transaction
Pricing
rules of
related
party
transaction
Price of
related
party
transactions
Amount
of
related
party
transacti
on
(RMB1
0,000)
Proporti
on in the
amount
of
similar
transacti
ons
Approve
d
transacti
on limit
(RMB10,000)
Whether
to
outstrip
the
approved limit
Settleme
nt of
related
party
transaction
Availabl
e market
prices
for
similar
transacti
ons
Date of
disclosure
Index
of
disclosure
Deng
Yingzho
ng,
Deng
Guanbia
o, Deng Guanjie
Actual
controll
er of the
Compan
y
Lease Rental
Market
fair price
Market
fair price
147.4 25.49% 294.81 No
Transfer
settlement
Market
fair price
Decemb
er 06, 2019
2019-
93
Deng
Yingzho
ng,
Deng
Guanbia
o, Deng Guanjie
Actual
controll
er of the
Company
Lease Rental
Market
fair
price
Market
fair
price
16.68 2.88% 33.36 No
Transfer
settleme
nt
Market
fair
price
October 30, 2020
2020-82
Deng
Yingzho
ng,
Deng
Guanbia
o, Deng Guanjie
Actual
controll
er of the
Company
Lease Rental
Market
fair price
Market
fair price
0.65 0.11% Yes
Transfer
settlement
Market
fair price
Pengzho
u
Lexiang
shenghu
o
Trading
Co.,
Ltd.
A
compan
y where
the
senior
manager
Yue
Yong’s
son
Daily
operatio
n
transaction
Sale of
goods
Market
fair price
Market
fair price
79.64 0.02% 150 No
Transfer
settlement
Market
fair price
Decemb
er 16, 2020
2020-
99
C&S Paper Co., Ltd. Semi-annual Report 2021
47
holds
shares
and
serves
as a
supervis
or
Sichuan
West
Lexiang
shenghu
o
Trading
Co.,
Ltd.
A
compan
y where
the
senior
manager
Yue
Yong’s
son
holds
shares
and
serves
as a
supervisor
Daily
operatio
n
transacti
on
Sale of
goods
Market
fair price
Market
fair price
28.91 0.01% 50 No
Transfer
settlement
Market
fair price
Decemb
er 16, 2020
2020-
99
Chongqi
ng
Qinyue
Trading
Co., Ltd.
A
compan
y where
the
senior
manager
Yue
Yong’s
brother
holds
shares
and
serves
as a
supervisor
Daily
operatio
n
transaction
Sale of
goods
Market
fair price
Market
fair price
0.00% 100 No
Transfer
settlement
Market
fair price
Decemb
er 16, 2020
2020-
99
Total -- -- 273.28 -- 628.17 -- -- -- -- --
Details of returns of large sales Not applicable
Where the total amount of daily
related-party transactions occurred in
the current period is estimated by
category, actual performance during
the reporting period (if any)
The excessive amounts of related party transaction of RMB6,500 in the reporting period is
renting properties from related parties. It falls within the authority of the Chairman of the
Company and can be implemented without the approval of the Board of Directors.
Reason(s) for a large difference
between the transaction price and the market reference price (if applicable)
Exercise at fair price
2. Related party transactions relating to acquisition and sale of assets or equity
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale of assets or
equity.
C&S Paper Co., Ltd. Semi-annual Report 2021
48
3. Related party transactions relating to joint outbound investment
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to joint outbound investment.
4. Related party transactions relating to creditor’s rights and debts
√ Applicable □ Not applicable
Whether there was non-operating related party transaction relating to creditor’s rights and debts
□ Yes √ No
During the reporting period, there was no non-operating related party transaction relating to creditor’s rights and
debts.
5. Transactions with related party financial companies or financial companies controlled by the Company
□ Applicable √ Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financial companies
that have related relationship, financial companies controlled by the Company and related parties.
6. Other significant related party transactions
□ Applicable √ Not applicable
During the reporting period, there were no other significant related party transactions.
XII. Significant Contracts and Their Performance
1. Custody, contracting and leasing matters
(1) Custody
□ Applicable √ Not applicable
During the reporting period, there was no custody.
(2) Contracting
□ Applicable √ Not applicable
C&S Paper Co., Ltd. Semi-annual Report 2021
49
During the reporting period, there was no contracting.
(3) Leasing
√ Applicable □ Not applicable
Description of leasing matters
On December 5, 2019, the Company convened the 19th meeting of the fourth session of the Board of Directors
and the 16th meeting of the fourth session of the Board of Supervisors, on which the Proposal on Daily Related
Party Transactions in 2021 was reviewed and approved. Due to the needs of operation and business, the Board of
Directors of the Company agreed that the Company and its wholly-owned subsidiary, Zhongshan Zhongshun
Trading Co., Ltd., leased the real estate jointly owned by Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng
Guanjie, the actual controllers of the Company. The lease term is from January 1, 2020 to December 31, 2021, and
the total rent involved is RMB5,896,200. During the deliberation of this proposal, the Company’s three related
directors, Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the
remaining six attending directors unanimously approved this related party transaction. The three independent
directors of the Company respectively issued Prior Approval Opinions and Opinions of Independent Directors on
the proposal, agreeing to submit the proposal to the Board of Directors for deliberation and agreeing to the related
party transaction.
On October 29, 2020, the Company convened the 28th meeting of the fourth session of the Board of Directors and
the 22nd meeting of the fourth session of the Board of Supervisors, on which the Proposal on Adding to Related-
Party Leasing Transactions was reviewed and approved. The Board of Directors of the Company agreed that the
Company’s wholly-owned subsidiary, C&S (Yunfu) Paper Co., Ltd., leased the real estate jointly owned by the
actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used as
its R&D center. The lease term is from November 1, 2020 to December 31, 2021, and the total rent involved is
RMB389,300. During the deliberation of this proposal, the Company’s three related directors, Mr. Deng
Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the remaining six attending
directors unanimously approved this related party transaction. The three independent directors of the Company
respectively issued Prior Approval Opinions and Opinions of Independent Directors on the proposal, agreeing to
submit the proposal to the Board of Directors for deliberation and agreeing to the related party transaction.
The Company’s holding subsidiary, Dolemi Sanitary Products Co., Ltd., leased the real estate jointly owned by
C&S Paper Co., Ltd. Semi-annual Report 2021
50
actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used as
residence. The lease term is from December 1, 2020 to December 31, 2021, and the total rent involved is
RMB14,100. The amount of this related party transaction falls within the approval authority of the Company’s
Chairman and has been approved by the Chairman.
Projects whose profits or losses brought to the Company reached more than 10% of the total profits of the
Company during the reporting period
□ Applicable √ Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the Company
reached more than 10% of the total profits of the Company during the reporting period.
2. Material guarantee
√ Applicable □ Not applicable
Unit: RMB10,000
External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)
Name of
guarantee
object
Disclosure
date of
relevant
announcem
ent on
guarantee
limit
Guarantee
limit
Actual date
of
occurrence
Actual
guarantee
amount
Guarantee
type
Collateral
(if any)
Counter
guarant
ee (if
any)
Guarantee
period
Whether
it has
been
complete
d
Whether
it is
related
party
guarantee
Wuhan Jie
Rou E-
commerce
Co., Ltd.
December
06, 2019 8,000
September
23, 2020 4,610
Joint and
several
liability
guarantee
None
Joint
and
several
liability
guarant
ee
2020.9.23
-2021.9.4 No No
Shanghai
Junmeng E-
commerce
Co., Ltd.
December
06, 2019 13,000
October 16,
2020 4,480
Joint and
several
liability
guarantee
None
Joint
and
several
liability
guarant
ee
2020.10.1
6-
2021.9.4
No No
Total approved amount
of external guarantee
during the reporting
period (A1)
0
Total actual amount of
external guarantee
during the reporting
period (A2)
0
Total approved amount
of external guarantee at
the end of the reporting
period (A3)
21,000
Total actual guarantee
balance at the end of the
reporting period (A4)
9,090
Guarantee of the Company for subsidiaries
Name of Disclosure Guarantee Actual date Actual Guarantee Collateral Counter Guarantee Whether Whether
C&S Paper Co., Ltd. Semi-annual Report 2021
51
guarantee
object
date of
relevant
announcem
ent on
guarantee
limit
limit of
occurrence
guarantee
amount
type (if any) guarant
ee (if
any)
period it has
been
complete
d
it is
related
party
guarantee
Zhongshan
Trading
December
05, 2019 15,000
September
15, 2020 12,385.56
Joint and
several
liability
guarantee
None None
2020.9.15
-
2023.8.31
No No
Zhongshan
Trading
December
15, 2020 13,600
March 02,
2021 0
Joint and
several
liability
guarantee
None None 2021.3.2-
2026.3.1 No No
Zhongshan
Trading
December
05, 2019 3,000
December
30, 2020 0
Joint and
several
liability
guarantee
None None
2020.12.3
0-
2024.12.3
1
No No
Zhongshan
Trading
December
05, 2019 25,000
December
15, 2020 0
Joint and
several
liability
guarantee
None None
2020.12.1
5-
2024.12.9
No No
Zhongshan
Trading
December
19, 2018 9,000
July 12,
2019 4,610
Joint and
several
liability
guarantee
None None
2019.7.12
-
2024.12.3
1
No No
Jiangmen
C&S
December
05, 2019 12,000
October 15,
2020 1,943.18
Joint and
several
liability
guarantee
None None
2020.10.1
5-
2023.8.31
No No
Jiangmen
C&S
December
15, 2017 10,000
March 27,
2018 0
Joint and
several
liability
guarantee
None None
2018.3.27
-
2023.12.3
1
No No
Jiangmen
C&S
December
15, 2020 12,000
January 04,
2021 4,648.97
Joint and
several
liability
guarantee
None None
2021.1.4-
2023.11.0
1
No No
Jiangmen
C&S
December
05, 2019 10,000
November
16, 2020 1,382.68
Joint and
several
liability
guarantee
None None
2020.11.2
6-
2023.11.2
5
No No
Jiangmen
C&S
December
15, 2020 15,000
May 13,
2021 0
Joint and
several
liability
guarantee
None None
2021.5.13
-
2024.3.30
No No
Jiangmen
C&S
December
05, 2019 5,000
December
23, 2020 0
Joint and
several
liability
guarantee
None None
2020.12.2
3-
2025.12.2
3
No No
Jiangmen
C&S
December
15, 2017 16,000
May 30,
2018 0
Joint and
several
liability
None None
2018.5.30
-
2023.5.30
No No
C&S Paper Co., Ltd. Semi-annual Report 2021
52
guarantee
Yunfu C&S December
05, 2019 8,000
April 14,
2020 0
Joint and
several
liability
guarantee
None None
2020.4.14
-
2028.4.14
No No
Yunfu C&S December
05, 2019 5,000
November
20, 2020 800
Joint and
several
liability
guarantee
None None
2020.11.2
0-
2023.12.3
1
No No
Yunfu C&S December
05, 2019 10,000
October 15,
2020 4,076.71
Joint and
several
liability
guarantee
None None
2020.10.1
5-
2023.8.31
No No
Yunfu C&S December
05, 2019 10,000
October 15,
2020 1,160.02
Joint and
several
liability
guarantee
None None
2020.11.1
6-
2023.11.1
5
No No
Yunfu C&S December
15, 2020 15,000
May 13,
2021 0
Joint and
several
liability
guarantee
None None
2021.5.13
-
2024.3.30
No No
Yunfu C&S December
15, 2020 7,000
January 04,
2021 1,722.39
Joint and
several
liability
guarantee
None None
2021.1.4-
2023.11.0
1
No No
Hubei C&S December
05, 2019 10,000
February
25, 2020 0
Joint and
several
liability
guarantee
None None
2020.2.25
-
2025.12.4
No No
Zhongshan
Trading,
Hubei
C&S, and
Macao
C&S
December
15, 2020 9,705.6
June 01,
2021 4,906.41
Joint and
several
liability
guarantee
None None 2021.6.1-
2023.4.22 No No
Jiangmen
C&S,
Yunfu
C&S,
Hubei C&S
December
19, 2018 25,000
January 08,
2019 19.18
Joint and
several
liability
guarantee
None None 2019.1.8-
2022.1.8 No No
C&S Hong
Kong,
Zhong
Shun
Internationa
l, Macao
C&S
December
05, 2019 32,352
July 08,
2020 482.57
Joint and
several
liability
guarantee
None None 2020.7.8-
2024.7.31 No No
C&S Hong
Kong,
Zhong
Shun
Internationa
l
December
05, 2019 16,913.96
March 20,
2020 1,341.23
Joint and
several
liability
guarantee
None None
2020.3.20
-
2022.9.19
No No
C&S Paper Co., Ltd. Semi-annual Report 2021
53
C&S Hong
Kong,,
Macao
C&S
December
15, 2020 33,328
March 17,
2021 2,523.47
Joint and
several
liability
guarantee
None None
2021.3.17
-
2025.12.3
1
No No
C&S Hong
Kong,
Zhong
Shun
Internationa
l, Macao
C&S
December
05, 2019 41,087.04
February
12, 2020 11,396.07
Joint and
several
liability
guarantee
None None
2020.2.12
-
2022.2.12
No No
C&S Hong
Kong,
Macao
C&S
December
05, 2019 12,940.8
February
25, 2020 2,463.14
Joint and
several
liability
guarantee
None None
2020.2.25
-
2022.2.25
No No
C&S Hong
Kong,,
Macao
C&S
December
05, 2019 6,470.4
November
12, 2020 0
Joint and
several
liability
guarantee
None None
2020.11.1
2-
2024.3.1
No No
C&S Hong
Kong,,
Macao
C&S
December
05, 2019 15,528.96
March 27,
2020 1,110.43
Joint and
several
liability
guarantee
None None
2020.3.27
-
2023.2.19
No No
C&S Hong
Kong,
Zhong
Shun
Internationa
l, Macao
C&S
December
15, 2017 17,997.12
September
28, 2018 0
Joint and
several
liability
guarantee
None None
2018.9.28
-
2022.8.31
No No
C&S Hong
Kong,
Zhong
Shun
Internationa
l, Macao
C&S
December
05, 2019 19,411.2
January 30,
2020 609.5
Joint and
several
liability
guarantee
None None
2020.1.30
-
2023.1.30
No No
Macao
C&S
December
15, 2017 7,117.44
March 23,
2018 1,553.22
Joint and
several
liability
guarantee
None None
2018.3.23
-
2022.9.23
No No
Macao
C&S
December
15, 2017 7,000
August 15,
2018 794.98
Joint and
several
liability
guarantee
None None
2018.8.15
-
2025.8.15
No No
Macao
C&S
December
15, 2020 6,470.4
March 30,
2021 1,009.38
Joint and
several
liability
guarantee
None None
2021.3.30
-
2024.3.30
No No
C&S Hong
Kong,
Zhong
Shun
Internationa
December
05, 2019 22,646.4
September
01, 2020 2,690.1
Joint and
several
liability
guarantee
None None 2020.9.1-
2022.7.9 No No
C&S Paper Co., Ltd. Semi-annual Report 2021
54
l, Macao
C&S
C&S Hong
Kong
December
05, 2019 14,105.47
July 01,
2020 11,376.24
Joint and
several
liability
guarantee
None None 2020.7.1-
2022.6.30 No No
Macao
C&S
December
05, 2019 27,046.27
July 01,
2020 8,717.77
Joint and
several
liability
guarantee
None None 2020.7.1-
2022.6.30 No No
Total approved amount
of guarantee for
subsidiaries during the
reporting period (B1)
112,104
Total actual amount of
guarantee for
subsidiaries during the
reporting period (B2)
14,810.62
Total approved amount
of guarantee for
subsidiaries at the end of
the reporting period (B3)
525,721.06
Total actual guarantee
balance to subsidiaries at
the end of the reporting
period (B4)
83,723.2
Guarantee of subsidiaries to subsidiaries
Name of
guarantee
object
Disclosure
date of
relevant
announcem
ent on
guarantee
limit
Guarantee
limit
Actual date
of
occurrence
Actual
guarantee
amount
Guarantee
type
Collateral
(if any)
Counter
guarant
ee (if
any)
Guarantee
period
Whether
it has
been
complete
d
Whether
it is
related
party
guarantee
Total amount of the Company’s guarantee (the sum of the first three items)
Total approved amount of
guarantee during the reporting
period (A1 + B1 + C1)
112,104
Total actual amount of
guarantee during the
reporting period (A2 +
B2 + C2)
14,810.62
Total approved amount of
guarantee at the end of the
reporting period (A3 + B3 + C3)
546,721.06
Total actual guarantee
balance at the end of the
reporting period
(A4+B4+C4)
92,813.2
Proportion of the total actual amount of guarantee
(A4 + B4 + C4) in the net assets of the Company 19.13%
Wherein:
Balance of guarantee for shareholders, actual
controllers and their related parties (D) 0
Balance of debt guarantee provided directly or
indirectly for objects whose asset-liability ratio
exceeds 70% (E)
0
Amount of guarantees in excess of 50% of net
assets (F) 31,011.15
Total amount of the above three guarantees (D + E
+ F) 31,011.15
Description of situations that the guarantee
liability has occurred or there is evidence showing
that the Company may be jointly and severally
liable for undue guarantee contracts during the
reporting period (if any)
None
C&S Paper Co., Ltd. Semi-annual Report 2021
55
Description of providing external guarantee in
violation of prescribed procedures (if any) No
Detailed description on the guarantees with different types: None
3. Entrusted wealth management
√ Applicable □ Not applicable
Unit: RMB10,000
Specific type
Source of entrusted
wealth management
funds
Incurred amount of
entrusted wealth
management
Undue balance Amount overdue but
not recovered
Amount overdue but
not recovered with
impairment having
been accrued
Wealth management
product of bank Self-owned fund 1,000 0 0 0
Wealth management
product of securities
company
Self-owned fund 9,500 0 0 0
Total 10,500 0 0 0
Explanation of high-risk entrusted wealth management with large individual amount or low safety, poor liquidity
and no principal guarantee
□ Applicable √ Not applicable
Entrusted wealth management is expected to fail to recover the principal or there are other circumstances that may
lead to impairment
□ Applicable √ Not applicable
4. Significant contracts for daily operation
□ Applicable √ Not applicable
5. Other significant contracts
□ Applicable √ Not applicable
There were no other significant contracts during the reporting period.
XIII. Other Significant Events
√ Applicable □ Not applicable
No. Announcement
time Announcement name
Announce
ment
Disclosure media
C&S Paper Co., Ltd. Semi-annual Report 2021
56
number
1 January 06, 2021 Announcement on Resolutions of the 30th Meeting of the Fourth
Session of the Board of Directors 2021-01
Securities Times,
Securities Daily,
China Securities
Journal, and CNINF
2 January 06, 2021 Announcement on Resolutions of the 24th Meeting of the Fourth
Session of the Board of Supervisors 2021-02
3 January 06, 2021 Announcement on the Re-election of the Board of Directors 2021-03
4 January 06, 2021 Announcement on the Re-election of the Board of Supervisor 2021-04
5 January 06, 2021 Plan of the Company for Repurchasing Partial Public Shares 2021-05
6 January 06, 2021 Notice on Convening 2021 First Extraordinary General Meeting 2021-06
7 January 06, 2021 Announcement on Completion of Stock Sales and Termination of
Phase II Employee Stock Ownership Plan 2021-07
8 January 06, 2021 Announcement on Pre-disclosure of the Share Reduction Plan by
Senior Management of the Company 2021-08
9 January 09, 2021 Announcement on Shareholding Information of the Top Ten
Shareholders in Matters Relevant to Share Repurchase 2021-09
10 January 09, 2021 Share Repurchase Report 2021-10
11 January 14, 2021 Announcement on Resolutions of the 31st Meeting of the Fourth
Session of the Board of Directors 2021-11
12 January 14, 2021 Announcement on Resolutions of the 25th Meeting of the Fourth
Session of the Board of Supervisors 2021-12
13 January 14, 2021 Announcement of the Company on Building a New 400,000-ton High-
grade Household Paper Project 2021-13
14 January 14, 2021 Announcement on Use of Self-owned Idle Funds for Reverse Repo of
Treasury Bonds in 2021 2021-14
15 January 14, 2021 Notice on Convening 2021 Second Extraordinary General Meeting 2021-15
16 January 14, 2021 Announcement on the Re-election of the Employee Representative
Supervisors 2021-16
17 January 15, 2021 Announcement on Wholly-owned Subsidiary Obtaining the High-tech
Enterprise Certificate (Renewal) 2021-17
18 January 22, 2021 Announcement on Resolutions of 2021 First Extraordinary General
Meeting of Shareholders 2021-18
19 January 22, 2021 Announcement on Resolutions of the 1st Meeting of the Fifth Session
of the Board of Directors 2021-19
20 January 22, 2021 Announcement on Resolutions of the 1st Meeting of the Fifth Session
of the Board of Supervisors 2021-20
21 January 22, 2021 Announcement on the Appointment of Senior Managers 2021-21
22 January 22, 2021 Announcement on the Appointment of the Person in Charge of the
Audit Dept. and the Representative of Securities Affairs 2021-22
23 January 22, 2021 Announcement on the Completion of Industrial and Commercial
Registration Amendment of Subsidiaries 2021-23
24 January 28, 2021 Announcement on the First Repurchase of Company Shares 2021-24
25 January 29, 2021 Announcement on Progress of Repurchase of Company Shares 2021-25
26 January 30, 2021 Announcement on Resolutions of 2021 Second Extraordinary General
Meeting of Shareholders 2021-26
27 January 30, 2021 Announcement on Progress of Repurchase of Company Shares 2021-27
28 February 03, 2021 Announcement on Progress of Repurchase of Company Shares 2021-28
29 February 05, 2021 Announcement on Progress of Repurchase of Company Shares 2021-29
30 February 06, 2021 Announcement on Completion of the Share Reduction Plan by Senior
Management of the Company 2021-30
31 February 27, 2021 Announcement on Investment and Establishment of a Wholly-owned 2021-31
C&S Paper Co., Ltd. Semi-annual Report 2021
57
Subsidiary and Completion of Industrial and Commercial
Registration
32 February 27, 2021 Annual Performance Bulletin 2020 2021-32
33 March 03, 2021 Announcement on Progress of Repurchase of Company Shares 2021-33
34 March 04, 2021 Announcement on Completion of the Industrial and Commercial
Registration Amendment of the Company 2021-34
35 March 04, 2021
Announcement on the Repurchase and Deregistration Completion of
Reserved Restricted Stocks Awarded in the First Grant under the 2018
Stock Option and Restricted Stock Incentive Plan
2021-35
36 March 06, 2021 Announcement on Independent Directors Obtaining the Qualification
Certificate for Independent Directors 2021-36
37 March 06, 2021 Announcement on the Early Termination of the Share Reduction Plan
by Directors and Senior Management of the Company 2021-37
38 March 10, 2021 Announcement on the Completion of Industrial and Commercial
Registration Amendment of Wholly-owned Subsidiary 2021-38
39 March 16, 2021 Announcement on the Progress of the New 400,000-ton High-grade
Household Paper Project 2021-39
40 March 19, 2021 Announcement on Resignation of the Company’s Director 2021-40
41 March 23, 2021 Announcement on Resolutions of the 2nd Meeting of the Fifth Session
of the Board of Directors 2021-41
42 March 23, 2021 Announcement on By-election of Non-Independent Directors of the
Fifth Session of the Board of Directors 2021-42
43 March 23, 2021 Announcement on Change of President of the Company 2021-43
44 March 23, 2021 Announcement on the Additional Appointment of the Representative of
Securities Affairs 2021-44
45 March 23, 2021 Notice on Convening the 2021 Third Extraordinary General Meeting 2021-45
46 March 24, 2021 Announcement on Progress of Repurchase of Company Shares 2021-46
47 March 25, 2021 Announcement on Progress of Repurchase of Company Shares 2021-47
48 April 06, 2021 Announcement on Progress of Repurchase of Company Shares 2021-48
49 April 08, 2021 Announcement on Resolutions of the 2021 Third Extraordinary
General Meeting 2021-49
50 April 10, 2021 Announcement on Acceptance Completion of Phase II of Hubei New
Project 2021-50
51 April 13, 2021 Announcement on Resolutions of 3rd Meeting of the Fifth Session of
the Board of Directors 2021-51
52 April 13, 2021 Announcement on Change of Chairman of the Company 2021-52
53 April 13, 2021 Announcement on Appointment of the Vice President of the Company 2021-53
54 April 29, 2021 Announcement on Resolutions of the 4th Meeting of the Fifth Session
of the Board of Directors 2021-54
55 April 29, 2021 Announcement on Resolutions of the 2nd Meeting of the Fifth Session
of the Board of Supervisors 2021-55
56 April 29, 2021 Summary of Annual Report 2020 2021-56
57 April 29, 2021 Announcement on the Proposal on 2020 Profit Distribution Plan 2021-57
58 April 29, 2021 Announcement on Appointment of the Vice President of the Company 2021-58
59 April 29, 2021 Notice on Convening 2020 Annual General Meeting 2021-59
60 April 29, 2021 Notice on Convening the Online Performance Presentation for Annual
Report 2020 2021-60
61 April 29, 2021 Text of the First Quarter Report 2021 2021-61
62 April 29, 2021 Announcement on Resignation of the Director and Co-president of the 2021-62
C&S Paper Co., Ltd. Semi-annual Report 2021
58
Company
63 May 06, 2021 Announcement on Progress of Repurchase of Company Shares 2021-63
64 May 07, 2021 Announcement on Wholly-owned Subsidiary Obtaining the High-tech
Enterprise Certificate (Renewal) 2021-64
65 May 08, 2021 Announcement on Progress of Repurchase of Company Shares 2021-65
66 May 10, 2021
Announcement on the Issuance of a Proposal by Chairman and Actual
Controllers of the Company to All Employees for Increasing
Shareholding of the Company
2021-66
67 May 10, 2021 Announcement on Commitments by Actual Controllers of the
Company of Not Reducing or Pledging Shares of the Company 2021-67
68 May 13, 2021 Announcement on Increase of Company Shares by Senior
Management and Supervisors of the Company 2021-68
69 May 14, 2021 Announcement on Increase of Company Shares by Chairman and
Senior Management of the Company 2021-69
70 May 19, 2021 Announcement on Increase of Company Shares by Senior
Management and Supervisors of the Company 2021-70
71 May 19, 2021 Reply to the Letter of Concern from Shenzhen Stock Exchange 2021-71
72 May 20, 2021 Announcement on Resolutions of 2020 Annual General Meeting of
Shareholders 2021-72
73 May 22, 2021 Announcement on Resolutions of the 5th Meeting of the Fifth Session
of the Board of Directors 2021-73
74 May 22, 2021 Announcement on Resolutions of the 3rd Meeting of the Fifth Session
of the Board of Supervisors 2021-74
75 May 22, 2021 Announcement on Adjusting the Price and Amount of the Company’s
Share Repurchase 2021-75
76 May 22, 2021 Announcement on Changes to Accounting Policies 2021-76
77 May 22, 2021 Announcement on Change of the Person in Charge of the Audit Dept.
of the Company 2021-77
78 May 22, 2021 Announcement on Continued Engagement of the Accounting Firm 2021-78
79 May 22, 2021 Announcement on Amending the Articles of Association of the
Company 2021-79
80 May 22, 2021
Announcement on Achieving the Unlock Conditions of the Second
Unlock Period for Restricted Stocks Awarded in the First Grant under
the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
2021-80
81 May 22, 2021
Announcement on Achieving the Exercise Conditions of the Second
Exercise Period for Stock Options Awarded in the First Grant under
the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
2021-81
82 May 22, 2021
Announcement on the Repurchase and Deregistration of Partial
Restricted Stocks Awarded in the First Grant under the Company’s
2018 Stock Option and Restricted Stock Incentive Plan
2021-82
83 May 22, 2021
Announcement on the Deregistration of Partial Stock Options
Awarded in the First Grant under the Company’s 2018 Stock Option
and Restricted Stock Incentive Plan
2021-83
84 May 22, 2021 Notice on Convening the 2021 Fourth Extraordinary General Meeting 2021-84
85 May 29, 2021 Announcement on Increase of Company Shares by Supervisors of the
Company 2021-85
86 June 02, 2021 Announcement on Progress of Repurchase of Company Shares 2021-86
87 June 03, 2021 Indicative Announcement on Convening the 2021 Fourth
Extraordinary General Meeting 2021-87
88 June 05, 2021 Announcement on Completion of the Industrial and Commercial
Registration Amendment of the Company 2021-88
89 June 08, 2021 Announcement on Resolutions of the 2021 Fourth Extraordinary 2021-89
C&S Paper Co., Ltd. Semi-annual Report 2021
59
General Meeting
90 June 08, 2021 Announcement on Capital Reduction 2021-90
91 June 08, 2021 Announcement on Progress of Repurchase of Company Shares 2021-91
92 June 08, 2021 Announcement on Progress of Repurchase of Company Shares 2021-92
93 June 11, 2021 Announcement on Implementation of 2020 Annual Equity Allocation 2021-93
94 June 19, 2021 Announcement on Resolutions of the 6th Meeting of the Fifth Session
of the Board of Directors 2021-94
95 June 19, 2021 Announcement on Resolutions of the 4th Meeting of the Fifth Session
of the Board of Supervisors 2021-95
96 June 19, 2021 Announcement on Adjusting the Exercise Price of Stock Options
under 2018 Stock Option and Restricted Stock Incentive Plan 2021-96
97 June 28, 2021
Indicative Announcement on Adopting the Autonomous Exercise Mode
in the Second Exercise Period for Stock Options Awarded in the First
Grant under the Company’s 2018 Stock Option and Restricted Stock
Incentive Plan
2021-97
98 June 28, 2021
Indicative Announcement on Lifting the Sales Restrictions in the
Second Unlock Period for Restricted Stocks Awarded in the First
Grant under the Company’s 2018 Stock Option and Restricted Stock
Incentive Plan
2021-98
XIV. Significant Events of Subsidiaries of the Company
√ Applicable □ Not applicable
No. Announcement
time Announcement name
Announcement
number Disclosure media
1 January 15, 2021 Announcement on Wholly-owned Subsidiary Obtaining the
High-tech Enterprise Certificate (Renewal) 2021-17
Securities Times,
Securities Daily,
China Securities
Journal, and CNINF
2 January 22, 2021 Announcement on the Completion of Industrial and Commercial
Registration Amendment of Subsidiaries 2021-23
3 February 27, 2021
Announcement on Investment and Establishment of a Wholly-
owned Subsidiary and Completion of Industrial and
Commercial Registration
2021-31
4 March 10, 2021 Announcement on the Completion of Industrial and Commercial
Registration Amendment of Wholly-owned Subsidiary 2021-38
5 May 07, 2021 Announcement on Wholly-owned Subsidiary Obtaining the
High-tech Enterprise Certificate (Renewal) 2021-64
C&S Paper Co., Ltd. Semi-annual Report 2021
60
Section VII Changes in Shareholding and Information of Shareholders
I. Changes in Share Capital
1. Changes in shares
Unit: share
Before change Increase/decrease (+, -) of this change After change
Number Percentag
e
New
shares
issued
Bonus
shares
Shares
transferr
ed from
surplus
reserve
Others Subtotal Number Percentag
e
I. Shares subject to
selling restrictions 36,858,323 2.81% 75,000 -7,165,895 -7,090,895 29,767,428 2.27%
1. Shares held by the
state
2. Shares held by
state-owned legal
person
3. Shares held by
other domestic
shareholders
34,906,289 2.66% -7,283,961 -7,283,961 27,622,328 2.11%
Including: Shares
held by domestic legal
persons
Shares held by
domestic natural
persons
34,906,289 2.66% -7,283,961 -7,283,961 27,622,328 2.11%
4. Shares held by
foreign shareholders 1,952,034 0.15% 75,000 118,066 193,066 2,145,100 0.16%
Including: Shares
held by foreign legal
persons
Shares held by
foreign natural persons 1,952,034 0.15% 75,000 118,066 193,066 2,145,100 0.16%
II. Shares without
selling restrictions 1,274,840,644 97.19% 386,478 6,954,005 7,340,483 1,282,181,127 97.73%
1. RMB-denominated
ordinary shares 1,274,840,644 97.19% 386,478 6,954,005 7,340,483 1,282,181,127 97.73%
2. Domestic listed
foreign shares
3. Overseas listed
foreign shares
4. Others
III. Total number of 1,311,698,967 100.00% 461,478 -211,890 249,588 1,311,948,555 100.00%
C&S Paper Co., Ltd. Semi-annual Report 2021
61
shares
Explanation on changes in shares
√ Applicable □ Not applicable
1. During January 1, 2021 and February 28, 2021, vesting incentive recipients of stock options awarded in the first
grant and reserved stock options under the 2018 Stock Option and Restricted Stock Incentive Plan exercised the
right of 461,478 shares. As a result, the Company’s total share capital increased by 461,478 shares.
2. During the first unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and
Restricted Stock Incentive Plan, 24 incentive recipients were unable to unlock the shares since they left the
Company or failed to pass performance appraisal or unable to unlock all the shares since they passed the
performance appraisal but failed to get a full mark and therefore could only unlock shares proportioned to their
mark. As a result, the Company had to repurchase and cancel a total of 211,890 restricted shares that had been
granted but not unlocked. The deregistration procedures for the aforementioned restricted shares had been
completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited as at March
3, 2021. As a result, the Company’s total share capital decreased by 211,890 shares.
Approval of changes in shares
√ Applicable □ Not applicable
1. The Board of Directors’ disposition of the repurchase and deregistration matters for the first unlocking of
reserved restricted shares under the 2018 Stock Option and Restricted Stock Incentive Plan had been authorized by
the 2019 First Extraordinary General Meeting and reviewed and approved by the 28th meeting of the fourth
session of the Board of Directors and 22nd meeting of the fourth session of the Board of Supervisors.
2. The Board of Directors’ disposition of the exercise matters for the first exercise period of restricted stock
options awarded in the first grant and reserved stock options under the 2018 Stock Option and Restricted Stock
Incentive Plan had been authorized by the 2019 First Extraordinary General Meeting and reviewed and approved
by the 23rd meeting of the fourth session of the Board of Directors, the 19th meeting of the fourth session of the
Board of Supervisors, the 28th meeting of the fourth session of the Board of Directors, and the 22nd meeting of
the fourth session of the Board of Supervisors.
Transfer of title of changed shares
□ Applicable √ Not applicable
Implementation of share repurchase
C&S Paper Co., Ltd. Semi-annual Report 2021
62
√ Applicable □ Not applicable
On January 5, 2021, the Company held the 30th meeting of the fourth session of the Board of Directors which
reviewed and passed the Proposal on Share Repurchase of the Company. The Company plans to repurchase shares
of the Company via centralized bidding transaction, with a total amount of RMB180million (inclusive) to
RMB360 million (inclusive). The repurchase price shall not outstrip RMB31.515/share (inclusive). All shares to
be repurchased will be used for equity incentives or employee stock ownership plans.
On May 21, 2021, the Company held the fifth meeting of the fifth session of the Board of Directors which
reviewed and passed the Proposal on Adjusting the Price and Amount of the Company’s Share Repurchase. Taking
into account positive changes in the capital market and the Company’s share price and based on confidence in
operations and future business development, the Company adjusts the upper price limit of the share repurchase
from RMB31.515/share (inclusive) to RMB45/share (inclusive) and the amount range from RMB180-360 million
to RMB330-660 million. This could ensure the smooth implementation of the share repurchase and relevant
incentive matters in the future.
From January 27 to June 30, 2021, the Company repurchased a total of 18,535,177 shares through its special
repurchase securities account, accounting for 1.4128% of its total share capital at the time. The highest and lowest
transaction price was RMB34.50/share and RMB23.27/share, respectively, and the total transaction amount was
RMB532,605,631.96 (excluding transaction fee).
Implementation of share repurchase by centralized bidding
□ Applicable √ Not applicable
Impact of share changes on basic earnings per share and diluted earnings per share, net assets per share
attributable to ordinary shareholders of the Company, and other financial indicators in last year and the latest
period
□ Applicable √ Not applicable
Other contents considered necessary by the Company or required to be disclosed by the securities regulatory
authority
□ Applicable √ Not applicable
2. Changes in shares subject to selling restrictions
√ Applicable □ Not applicable
C&S Paper Co., Ltd. Semi-annual Report 2021
63
Unit: share
Shareholder’s
name
Number of shares
subject to selling
restrictions at the
beginning of the
period
Number of
shares released
from selling
restrictions
during the
period
Increase in
shares subject to
selling
restrictions
during the
period
Number of
shares subject to
selling
restrictions at
the end of the
year
Reason for Selling
restrictions
Date of release
from selling
restrictions
Deng Yingzhong 5,064,608 5,064,608 Lock-up shares of
senior management Long-term
Deng Guanbiao 3,718,105 3,718,105 Lock-up shares of
senior management Long-term
Deng Guanjie 900,730 900,730 Lock-up shares of
senior management Long-term
Liu Peng 45,975 45,975
Lock-up shares of
senior management;
the increase in
restricted shares is due
to the proportional
locking of
shareholding increase
Long-term
Liu Jinfeng 1,579,475 527,563 1,051,912 Lock-up shares of
senior management Long-term
Chen Haiyuan 12,675 12,675
Lock-up shares of
senior management;
the increase in
restricted shares is due
to the proportional
locking of
shareholding increase
Long-term
Li Youquan 33,300 33,300 Lock-up shares of
senior management Long-term
Yue Yong 9,261,243 2,127,937 330,000 7,463,305
Lock-up shares of
senior management;
the increase in
restricted shares is due
to the proportional
locking of unlocked
restricted shares
Long-term
Zhou
QichaoZhou
Qichao
497,754 123,750 374,004 Lock-up shares of
senior management Long-term
Ye LongfangYe
Longfang 112,500 112,500
Lock-up shares of
senior management Long-term
Dong Ye 119,794 53,250 45,000 111,544
Lock-up shares of
senior management;
the increase in
restricted shares is due
to the proportional
locking of unlocked
restricted shares
Long-term
Li Zhaojin 8,100 8,100
Lock-up shares of
senior management;
the increase in
Long-term
C&S Paper Co., Ltd. Semi-annual Report 2021
64
restricted shares is due
to the proportional
locking of
shareholding increase
Deng Wenxi 15,825 15,825
Lock-up shares of
senior management;
the increase in
restricted shares is due
to the proportional
locking of
shareholding increase
Long-term
Dai Zhenji 265,034 304,966 570,000
Lock-up shares of
senior management;
no share reduction
within 6 months upon
leaving the post, with
all shares being locked
Release of selling
restrictions in
accordance with
relevant
regulations
Equity incentive
recipients 15,305,780 5,020,935 10,284,845
In accordance with
2018 Stock Option and
Restricted Stock
Incentive Plan (Draft),
the second unlocking
was conducted for
restricted stocks of
some incentive
recipients awarded in
the first grant, with an
unlocking ratio of
30%. The second and
third unlocking for
reserved stocks has
not been conducted.
Pursuant to 2018
Stock Option and
Restricted Stock
Incentive Plan
(Draft)
Total 36,858,323 7,853,435 762,541 29,767,428 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Shareholding
Unit: share
Total number of ordinary
shareholders as at the end of
the reporting period
75,430
Total number of preferred
shareholders whose voting
rights were resumed at the end
of the reporting period (if any)
(see Note VIII)
0
Shareholdings of ordinary shareholders with more than 5% or the top 10 ordinary shareholders
Name of
shareholder Nature of shareholder
Share
holdin
g
percen
tage
(%)
Number of
ordinary
shares held at
the end of the
reporting
period
Increase/dec
rease during
the reporting
period
Number of
ordinary
shares held
subject to
selling
restrictions
Number of
ordinary shares
held without
selling
restrictions
Pledged, marked or
frozen
Share
status
Number
of
shares
C&S Paper Co., Ltd. Semi-annual Report 2021
65
Guangdong
Zhongshun
Paper Group
Co., Ltd.
Domestic non-state-
owned legal person
28.63
% 375,655,958 375,655,958
Chung Shun
Co. Foreign legal person
20.31
% 266,504,789 266,504,789
Hong Kong
Securities
Clearing Co.,
Ltd.
Foreign legal person 7.12% 93,436,636 93,436,636
National Social
Security Fund
Portfolio 406
Others 1.00% 13,112,327 13,112,327
ICBC - Fuguo
Tianhui Select
Growth Hybrid
Securities
Investment
Fund (LOF)
Others 0.79% 10,303,557 10,303,557
Yue Yong Domestic natural person 0.74% 9,665,241 7,903,305 1,761,936
CCB - Fuguo
Value Creation
Hybrid
Securities
Investment
Fund
Others 0.74% 9,664,807 9,664,807
CITIC
Securities -
CITIC Bank -
CITIC
Securities
Outstanding
Growth Two-
Year Holding
Period Hybrid
Collective Asset
Management
Plan
Others 0.68% 8,958,645 8,958,645
Taikang Life
Insurance -
Unit-linked -
Innovation
Power
Others 0.67% 8,773,968 8,773,968
National Social
Security Fund
Portfolio 101
Others 0.59% 7,749,378 7,749,378
Description on the related relationship or
parties acting-in-concert arrangements
among the above shareholders
1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper
Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers
of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
Mr. Yue Yong is an incumbent senior manager of the Company.
2. It is unknown to the Company whether there is related party relationship among other
shareholders, or whether there is acting-in-concert among other shareholders as
stipulated in the Administrative Measures for the Disclosure of Information on Changes
C&S Paper Co., Ltd. Semi-annual Report 2021
66
in Shareholders’ Shareholding of Listed Companies.
Description on entrusting/being entrusted
with voting rights and waver of voting
rights by the aforementioned
shareholders:
None
Description on special repurchase
account among top 10 shareholders (if
any) (see note 11)
There is a special repurchase account “C&S Paper Special Repurchase Securities
Account” among the top 10 shareholders. As of the end of the reporting period, this
repurchase account held 20,431,077 shares, with a shareholding ratio of 1.56%. Pursuant
to relevant regulations, it is not included in the list of top 10 shareholders.
Shareholdings of top 10 ordinary shareholders not subject to selling restrictions
Name of shareholder
Number of ordinary shares held at the end of the
reporting period not subject to selling
restrictions
Type of shares
Type of shares Number of shares
Guangdong Zhongshun Paper Group Co.,
Ltd. 375,655,958
RMB-
denominated
ordinary shares
375,655,958
Chung Shun Co. 266,504,789
RMB-
denominated
ordinary shares
266,504,789
Hong Kong Securities Clearing Co., Ltd. 93,436,636
RMB-
denominated
ordinary shares
93,436,636
National Social Security Fund Portfolio
406 13,112,327
RMB-
denominated
ordinary shares
13,112,327
ICBC - Fuguo Tianhui Select Growth
Hybrid Securities Investment Fund (LOF) 10,303,557
RMB-
denominated
ordinary shares
10,303,557
CCB - Fuguo Value Creation Hybrid
Securities Investment Fund 9,664,807
RMB-
denominated
ordinary shares
9,664,807
CITIC Securities - CITIC Bank - CITIC
Securities Outstanding Growth Two-Year
Holding Period Hybrid Collective Asset
Management Plan
8,958,645
RMB-
denominated
ordinary shares
8,958,645
Taikang Life Insurance - Unit-linked -
Innovation Power 8,773,968
RMB-
denominated
ordinary shares
8,773,968
National Social Security Fund Portfolio
101 7,749,378
RMB-
denominated
ordinary shares
7,749,378
Yue Yong 1,761,936
RMB-
denominated
ordinary shares
1,761,936
Description on the related relationship or
parties acting-in-concert among the top
ten ordinary shareholders without selling
restrictions and between the top ten
ordinary shareholders without selling
restrictions and the top ten ordinary
shareholders
1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper
Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers
of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
Mr. Yue Yong is an incumbent senior manager of the Company.
2. It is unknown to the Company whether there is related party relationship among other
shareholders, or whether there is acting-in-concert among other shareholders as
stipulated in the Administrative Measures for the Disclosure of Information on Changes
C&S Paper Co., Ltd. Semi-annual Report 2021
67
in Shareholders’ Shareholding of Listed Companies.
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions conducted the
agreed repurchase transaction during the reporting period
□ Yes √ No
The Company’s top ten ordinary shareholders and top ten ordinary shareholders without selling restrictions did
not conduct agreed repurchase transactions during the reporting period.
IV. Changes in Shareholding of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Position Position
status
Number of
shares held
at the
beginning
of the year
Increase of
shares
during the
year
Decrease
of shares
during the
year
Number of
shares held
at the end
of the year
Number of
shares subject
to selling
restrictions
granted at the
beginning of
the period
Number of
shares subject
to selling
restrictions
granted in the
period
Number of
shares subject to
selling
restrictions
granted at the
end of the period
Deng
Yingzhong Director Incumbent 6,752,811 6,752,811
Liu Peng Chairman,
President Incumbent 61,300 61,300
Deng
Guanbiao
Vice
Chairman Incumbent 4,957,473 4,957,473
Deng
Guanjie
Vice
Chairman Incumbent 1,200,974 1,200,974
Liu
Jinfeng
Director,
Vice
President
Incumbent 2,410,550 601,200 1,809,350
He Haidi Independe
nt Director Incumbent
He
Guoquan
Independe
nt Director Incumbent
Liu Die Independe
nt Director Incumbent
Yue Yong Vice
President Incumbent 10,537,741 872,500 9,665,241
Ye
Longfang
Vice
President Incumbent 150,000 150,000
Li Zhaojin Vice
President Incumbent 10,800 10,800
Deng
Wenxi
Vice
President Incumbent 21,100 21,100
Zhang
Yang
Vice
President Incumbent
Dong Ye Chief Incumbent 228,725 228,725
C&S Paper Co., Ltd. Semi-annual Report 2021
68
Financial
Officer
Chen
Haiyuan
Chairman
of the
Board of
Supervisor
s
Incumbent 5,000 5,000
Liang
Yongliang Supervisor Incumbent
Li
Youquan Supervisor Resigned 62,280 3,000 65,280
Dai Zhenji
Director,
Joint
President
Resigned 1,670,000 300,000 1,970,000
Deng
Yingzhong Chairman Resigned
Deng
Guanbiao President Resigned
Zhou
Qichao
Board
Secretary,
Vice
President
Resigned 498,672 124,600 374,072
Yue Yong Director Resigned
Zeng Yi Director Resigned
Huang
Hongyan
Independe
nt Director Resigned
Ge
Guangrui
Independe
nt Director Resigned
Total -- -- 28,469,226 401,200 1,598,300 27,272,126 0 0 0
V. Changes of Shareholders and Actual Controllers
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s controlling shareholder during the reporting period.
Changes of actual controllers during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s actual controllers during the reporting period.
C&S Paper Co., Ltd. Semi-annual Report 2021
69
Section VIII Particulars of Preference Shares
□ Applicable √ Not applicable
The Company had no preference shares during the reporting period.
C&S Paper Co., Ltd. Semi-annual Report 2021
70
Section IX Corporate Bonds
□ Applicable √ Not applicable
C&S Paper Co., Ltd. Semi-annual Report 2021
71
Section X Financial Report
I. Audit Report
Whether the Semi-annual Report has been audited
□ Yes √ No
The Semi-annual Report of the Company has not been audited.
II. Financial Statements
Unit of financial statements: RMB
1. Consolidated balance sheet
Prepared by: C&S Paper Co., Ltd.
June 30, 2021
Unit: RMB
Item June 30, 2021 December 31, 2020
Current assets:
Monetary funds 788,702,136.99 1,125,196,199.56
Settlement reserve
Lending to banks and other
financial institutions
Tradable financial assets
Derivative financial assets
Notes receivable 1,513,142.38 724,419.74
Accounts receivable 933,313,137.98 1,051,423,939.59
Accounts receivable financing
Prepayments 12,834,587.00 26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract reserves
receivable
Other receivables 21,117,810.56 15,824,945.56
Including: Interest receivable
Dividends receivable
Financial assets held under resale
agreements
Inventory 1,624,309,444.82 1,661,274,495.32
C&S Paper Co., Ltd. Semi-annual Report 2021
72
Contract assets
Assets held for sale 57,073,059.69 57,073,059.69
Non-current assets due within one
year
Other current assets 34,666,236.56 101,584,569.30
Total current assets 3,473,529,555.98 4,039,920,737.33
Non-current assets:
Loans and advances to customers
Investments in creditor’s rights
Investments in other creditor’s
rights
Long-term receivable
Long-term equity investment
Investment in other equity
instruments
Other non-current financial assets
Investment property 33,856,923.84 34,575,365.94
Fixed assets 3,182,792,165.52 2,792,587,302.21
Construction work in progress 55,534,528.69 275,904,617.95
Productive biological assets
Oil & gas assets
Right-of-use assets 11,151,372.57
Intangible assets 169,199,442.04 169,355,772.24
Development expenses
Goodwill 64,654.15 64,654.15
Long-term deferred expenses 22,695,522.53 26,635,983.14
Deferred income tax assets 145,176,431.76 111,367,362.66
Other non-current assets 44,934,505.84 28,027,952.15
Total non-current assets 3,665,405,546.94 3,438,519,010.44
Total assets 7,138,935,102.92 7,478,439,747.77
Current liabilities:
Short-term borrowings 142,942,941.34
Borrowings from PBC
Placements from banks and other
financial institutions
Tradable financial liabilities
Derivative financial liabilities
Notes payable 289,707,176.43 234,887,563.22
Accounts payable 723,033,087.39 761,519,389.26
Payments received in advance
Contract liabilities 103,501,369.49 137,333,617.40
Proceeds from financial assets sold
under repo
C&S Paper Co., Ltd. Semi-annual Report 2021
73
Customer bank deposits and due to
banks and other financial institutions
Funds from securities trading
agency
Funds from securities underwriting
agency
Employee remuneration payable 111,500,389.45 123,524,627.11
Tax and fees payable 77,697,704.37 112,608,054.87
Other payables 796,391,000.45 754,844,580.09
Including: Interests payable
Dividends payable 1,594,446.41 1,437,466.77
Transaction fee and commission
receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities due within
one year 6,038,594.62
Other current liabilities 13,400,882.00 17,628,086.63
Total current liabilities 2,121,270,204.20 2,285,288,859.92
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 5,526,106.56
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 112,092,990.63 115,101,158.13
Deferred income tax liabilities 47,103,893.91 35,903,653.30
Other non-current liabilities
Total non-current liabilities 164,722,991.10 151,004,811.43
Total liabilities 2,285,993,195.30 2,436,293,671.35
Owner’s equity:
Share capital 1,311,043,971.00 1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 941,625,561.08 907,006,505.05
Less: Treasury shares 599,354,148.06 96,480,911.29
Other comprehensive income
Special reserves
C&S Paper Co., Ltd. Semi-annual Report 2021
74
Surplus reserves 61,469,258.27 61,469,258.27
General reserves
Retained earnings 3,137,073,935.13 2,858,664,147.39
Total equity attributable to owners of
the parent company 4,851,858,577.42 5,042,146,076.42
Equities of minority shareholders 1,083,330.20
Total owner’s equity 4,852,941,907.62 5,042,146,076.42
Total liabilities and owners’ equities 7,138,935,102.92 7,478,439,747.77
Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accounting
department: Xu Xianjing
2. Balance sheet of the Parent Company
Unit: RMB
Item June 30, 2021 December 31, 2020
Current assets:
Monetary funds 83,716,953.94 170,229,178.13
Tradable financial assets
Derivative financial assets
Notes receivable
Accounts receivable 180,374,886.52 92,647,372.33
Accounts receivable financing
Prepayments 9,452,593.95 7,940,396.34
Other receivables 114,345,050.47 136,987,584.64
Including: Interest receivable
Dividends receivable
Inventory 172,205,617.01 156,605,546.36
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 2,287,198.40 52,517,725.87
Total current assets 562,382,300.29 616,927,803.67
Non-current assets:
Investments in creditor’s rights
Investments in other creditor’s
rights
Long-term receivable
Long-term equity investment 1,939,122,205.28 1,928,113,219.50
Investment in other equity
instruments
Other non-current financial assets
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75
Investment property 17,549,963.77 17,939,329.51
Fixed assets 248,258,276.83 257,354,688.59
Construction work in progress 544,254.89
Productive biological assets
Oil & gas assets
Right-of-use assets 2,054,171.93
Intangible assets 26,626,212.20 25,205,232.21
Development expenses
Goodwill
Long-term deferred expenses
Deferred income tax assets 65,222,700.02 46,811,106.77
Other non-current assets 16,107,417.95 2,619,959.27
Total non-current assets 2,315,485,202.87 2,278,043,535.85
Total assets 2,877,867,503.16 2,894,971,339.52
Current liabilities:
Short-term borrowings
Tradable financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 552,768,863.59 420,061,168.44
Payments received in advance
Contract liabilities 43,205,322.20 17,388,431.01
Employee remuneration payable 37,443,890.70 44,678,713.21
Tax and fees payable 5,413,588.15 5,995,417.05
Other payables 93,744,117.45 126,072,040.24
Including: Interests payable
Dividends payable 1,594,446.41 1,437,466.77
Liabilities held for sale
Non-current liabilities due within
one year 733,541.13
Other current liabilities 5,616,691.89 2,260,496.03
Total current liabilities 738,926,015.11 616,456,265.98
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 1,331,461.99
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 5,251,791.53 5,855,467.25
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Deferred income tax liabilities 7,250,149.26 7,202,336.33
Other non-current liabilities
Total non-current liabilities 13,833,402.78 13,057,803.58
Total liabilities 752,759,417.89 629,514,069.56
Owner’s equity:
Share capital 1,311,043,971.00 1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 861,277,099.91 831,693,206.19
Less: Treasury shares 599,354,148.06 96,480,911.29
Other comprehensive income
Special reserves
Surplus reserves 61,347,923.99 61,347,923.99
Retained earnings 490,793,238.43 157,409,974.07
Total owner’s equity 2,125,108,085.27 2,265,457,269.96
Total liabilities and owners’ equities 2,877,867,503.16 2,894,971,339.52
3. Consolidated income statement
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Total Operating Income 4,247,641,836.38 3,616,201,399.80
Including: Operating income 4,247,641,836.38 3,616,201,399.80
Interest income
Gross earned premiums
Service charge and
commission income
II. Total Operating Cost 3,767,785,569.02 3,081,938,688.14
Including: Operating costs 2,562,244,166.21 1,931,406,918.16
Interest expenses
Service charge and
commission expenses
Surrender value
Net compensation expenses
Net appropriation of
insurance reserve
Policy dividends expenses
Reinsurance costs
Tax and surcharges 29,251,004.43 26,920,007.36
Selling expenses 915,478,651.72 848,071,082.60
Administrative expenses 165,200,078.38 185,701,854.01
R&D expenses 97,414,812.32 90,860,828.24
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Finance expenses -1,803,144.04 -1,022,002.23
Including: Interest fees 975,546.01 1,140,788.29
Interest income 6,623,270.61 4,060,998.02
Plus: Other income 11,671,362.52 15,174,645.20
Return on investment (“-”
indicates loss) 358,473.15 2,287,274.87
Including: Return on
investment in associates and joint
ventures
Income from the
derecognition of financial assets
measured at amortized cost
Exchange gains (“-” indicates
loss)
Gains from net exposure
hedging (“-” indicates loss)
Gains from changes in fair
value (“-” indicates loss)
Credit impairment losses (“-”
indicates loss) 1,301,606.93 -1,423,699.75
Asset impairment losses (“-”
indicates loss) -2,753,828.11 -850,381.40
Return on disposal of assets (“-
” indicates loss) -259,896.46 -896,870.05
III. Operating Profit (“-” indicates loss) 490,173,985.39 548,553,680.53
Plus: Non-operating income 1,708,366.54 3,169,241.16
Less: Non-operating expenditure 3,638,183.86 13,240,183.16
IV. Total Profit (“-” indicates total loss) 488,244,168.07 538,482,738.53
Less: Income tax expense 81,099,520.72 85,783,253.92
V. Net Profit (“-” indicates net loss) 407,144,647.35 452,699,484.61
i. Classified by operation continuity
1. Net profit from continued
operation (“-” indicates net loss) 407,144,647.35 452,699,484.61
2. Net profit from discontinued
operation (“-” indicates net loss)
ii. Classified by attribution of
ownership
1. Net profit attributable to owners
of the parent company 407,161,317.15 452,699,484.61
2. Minority shareholders’ profits and
losses -16,669.80
VI. Net Amount of Other Comprehensive
Income after Tax
Total other comprehensive after-tax net
income attributable to owners of the
parent company
i. Other comprehensive income not
able to be reclassified into the profit or
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loss
1. Changes of re-
measurement of the defined benefit plan
2. Other comprehensive
income that cannot be transferred into the
profit or loss under equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value of
credit risk of the enterprise
5. Others
ii. Other comprehensive income
reclassified into the profit or loss
1. Other comprehensive
income to be transferred into the profit or
loss under equity method
2. Changes in fair value of
investment in other creditor’s rights
3. Financial assets
reclassified into other comprehensive
income
4. Impairment provision for
credit of investment in other creditor’s
rights
5. Reserve of cash flow
hedge
6. Converted difference in
foreign currency financial statements
7. Others
Total other comprehensive after-tax net
income attributable to minority
shareholders
VII. Total Comprehensive Income 407,144,647.35 452,699,484.61
Total comprehensive income
attributable to owners of the parent
company
407,161,317.15 452,699,484.61
Total comprehensive income
attributable to minority shareholders -16,669.80
VIII. Earnings per Share:
i. Basic earnings per share 0.3140 0.3519
ii. Diluted earnings per share 0.3109 0.3462
For business combinations of the current period under common control, the net profit realized by the combined party before the
combination is: RMB0.00; the net profit realized by the combined party in last period is: RMB0.00.
Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accounting
department: Xu Xianjing
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4. Income statement of the Parent Company
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Operating Income 916,066,342.46 853,891,264.03
Less: Operating cost 788,799,370.03 712,614,977.74
Tax and surcharges 2,176,306.49 2,631,659.04
Selling expenses 87,176,883.65 66,501,515.28
Administrative expenses 65,964,350.45 91,173,785.60
R&D expenses
Finance expenses -884,099.85 672,377.63
Including: Interest fees 26,220.26
Interest income 809,358.94 1,722,164.19
Plus: Other income 1,516,457.89 1,098,835.80
Return on investment (“-”
indicates loss) 482,704,072.79 142,109,515.77
Including: Return on
investment in associates and joint
ventures
Profits from
derecognition of financial assets at
amortized cost
Gains from net exposure
hedging (“-” indicates loss)
Gains from changes in fair
value (“-” indicates loss)
Credit impairment losses (“-”
indicates loss) -573,774.23 -1,477,826.65
Asset impairment losses (“-”
indicates loss) -15,126.42 -235,210.66
Return on disposal of assets
(“-” indicates loss) -613,479.84
II. Operating Profit (“-” indicates loss) 456,465,161.72 121,178,783.16
Plus: Non-operating income 204,390.14 367,540.33
Less: Non-operating expenditure 1,457,600.53 11,762,151.77
III. Total Profit (“-” indicates total loss) 455,211,951.33 109,784,171.72
Less: Income tax expense -6,922,842.44 -3,727,647.46
IV. Net Profit (“-” indicates net loss) 462,134,793.77 113,511,819.18
i. Net profit from continued
operation (“-” indicates net loss) 462,134,793.77 113,511,819.18
ii. Net profit from discontinued
operation (“-” indicates net loss)
V. Net Amount of Other Comprehensive
Income after Tax
i. Other comprehensive income not
able to be reclassified into the profit or
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80
loss
1. Changes of re-
measurement of the defined benefit plan
2. Other comprehensive
income that cannot be transferred into
the profit or loss under equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value of
credit risk of the enterprise
5. Others
ii. Other comprehensive income
reclassified into the profit or loss
1. Other comprehensive
income to be transferred into the profit
or loss under equity method
2. Changes in fair value of
investment in other creditor’s rights
3. Financial assets
reclassified into other comprehensive
income
4. Impairment provision for
credit of investment in other creditor’s
rights
5. Reserve of cash flow
hedge
6. Converted difference in
foreign currency financial statements
7. Others
VI. Total Comprehensive Income 462,134,793.77 113,511,819.18
VII. Earnings per Share:
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
rendering of services 4,360,141,241.09 3,613,430,926.28
Net increase in deposits from
customers, banks and non-bank financial
institutions
Net increase in due to central banks
Net increase in placements from other
financial institutions
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81
Cash received from the premium of
direct insurance contracts
Net cash from reinsurance business
Net increase in deposits and
investment of the insured
Cash obtained from interest, net fee
and commission
Net increase in placements from banks
and other financial institutions
Net increase in repo service fund
Net cash from agent securities trading
Tax rebates 120,214.00
Cash received related to other
operating activities 38,362,676.67 76,989,647.10
Sub-total of cash inflow from operating
activities 4,398,503,917.76 3,690,540,787.38
Cash paid for goods purchased and
services rendered 2,487,866,757.79 2,226,834,895.97
Net loans and advances to customers
Net increase in deposits with the
central bank, banks and non-bank financial
institutions
Cash paid for claims of direct
insurance contracts
Net increase in placements with banks
and non-bank financial institutions
Cash paid for interest, fee and
commission
Cash paid for dividends of the insured
Cash paid to and on behalf of
employees 435,057,207.01 340,957,388.41
Tax payments 310,071,504.86 259,738,653.85
Cash payments related to other
operating activities 427,642,659.91 358,451,260.82
Sub-total of cash outflow from operating
activities 3,660,638,129.57 3,185,982,199.05
Net cash flows from operating activities 737,865,788.19 504,558,588.33
II. Cash Flows from Investing Activities:
Cash from realization of investment
Cash received from the return on
investments 358,473.15 2,287,274.87
Net cash received from the disposal of
fixed assets, intangible assets, and other
long-term assets
10,542,186.47 30,060,788.00
Net amount of cash received from the
disposal of subsidiaries and other operating
organizations
Cash received related to other 50,000,000.00 127,105,000.00
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82
investing activities
Sub-total of cash inflow from investing
activities 60,900,659.62 159,453,062.87
Cash paid for the acquisition and
construction of fixed assets, intangible
assets, and other long-term assets
328,193,755.53 188,914,982.57
Cash paid for investments
Net increase in pledged loans
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
investing activities 212,400,000.00
Sub-total of cash outflow from investing
activities 328,193,755.53 401,314,982.57
Net cash flows from investing activities -267,293,095.91 -241,861,919.70
III. Cash Flows from Financing Activities:
Cash received from capital
contribution 11,355,276.29
Including: Proceeds received by
subsidiaries from minority shareholders’
investment
Cash received from borrowings 13,042,460.23 257,722,148.28
Cash received related to other
financing activities
Sub-total of cash inflow from financing
activities 24,397,736.52 257,722,148.28
Cash paid for repayments of
borrowings 155,939,151.58 164,917,045.18
Cash payment for interest expenses
and distribution of dividends or profits 129,388,592.82 98,173,895.03
Including: Dividend and profit paid by
subsidiaries to minority shareholders
Cash payments related to other
financing activities 554,697,666.71 40,446,866.90
Sub-total of cash outflow from financing
activities 840,025,411.11 303,537,807.11
Net cash flows from financing activities -815,627,674.59 -45,815,658.83
IV. Effect of Exchange Rate Changes on
Cash and Cash Equivalents -3,754,951.08 3,555,983.87
V. Net Increase in Cash and Cash
Equivalents -348,809,933.39 220,436,993.67
Plus: Opening balance of cash and
cash equivalents 1,050,034,135.72 675,996,852.97
VI. Closing Balance of Cash and Cash
Equivalents 701,224,202.33 896,433,846.64
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83
6. Cash flow statement of the Parent Company
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
rendering of services 825,204,668.76 746,412,698.39
Tax rebates 120,214.00
Cash received related to other operating
activities 350,780,128.27 987,204,013.79
Sub-total of cash inflow from operating
activities 1,175,984,797.03 1,733,736,926.18
Cash paid for goods purchased and
services rendered 628,652,955.42 491,197,761.73
Cash paid to and on behalf of employees 105,969,767.52 66,675,479.70
Tax payments 12,714,786.96 21,863,845.36
Cash payments related to other operating
activities 361,078,648.58 428,397,315.97
Sub-total of cash outflow from operating
activities 1,108,416,158.48 1,008,134,402.76
Net cash flows from operating activities 67,568,638.55 725,602,523.42
II. Cash Flows from Investing Activities:
Cash from realization of investment
Cash received from the return on
investments 482,704,072.79 141,992,629.47
Net cash received from the disposal of
fixed assets, intangible assets, and other long-
term assets
Net amount of cash received from the
disposal of subsidiaries and other operating
organizations
Cash received related to other investing
activities 50,000,000.00 127,105,000.00
Sub-total of cash inflow from investing
activities 532,704,072.79 269,097,629.47
Cash paid for the acquisition and
construction of fixed assets, intangible assets,
and other long-term assets
21,866,189.95 18,608,797.77
Cash paid for investments 5,000,000.00 665,600,000.00
Net amount of cash paid for acquisition of
subsidiaries and other operating organizations
Cash payments related to other investing
activities 152,400,000.00
Sub-total of cash outflow from investing
activities 26,866,189.95 836,608,797.77
Net cash flows from investing activities 505,837,882.84 -567,511,168.30
III. Cash Flows from Financing Activities:
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84
Cash received from capital contribution 10,255,276.29
Cash received from borrowings
Cash received related to other financing
activities
Sub-total of cash inflow from financing
activities 10,255,276.29
Cash paid for repayments of borrowings
Cash payment for interest expenses and
distribution of dividends or profits 128,594,549.77 96,955,934.28
Cash payments related to other financing
activities 574,898,356.02 31,482,661.04
Sub-total of cash outflow from financing
activities 703,492,905.79 128,438,595.32
Net cash flows from financing activities -693,237,629.50 -128,438,595.32
IV. Effect of Exchange Rate Changes on Cash
and Cash Equivalents -783.27 259,845.46
V. Net Increase in Cash and Cash Equivalents -119,831,891.38 29,912,605.26
Plus: Opening balance of cash and cash
equivalents 169,851,203.76 156,151,560.82
VI. Closing Balance of Cash and Cash
Equivalents 50,019,312.38 186,064,166.08
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85
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
Item
Half-Year of 2021
Owner’s equity attributable to the Parent Company
Equity of
minority
shareholders
Total owner’s
equity Share capital
Other equity
instruments
Capital reserve Less: Treasury
shares
Other
compr
ehensi
ve
incom
e
Specia
l
reserv
es
Surplus
reserves
Gener
al
reserv
es
Retained earnings Others Subtotal
Pref
eren
ce
shar
es
Perp
etual
bond
s
Othe
rs
I. Balance at
the End of
Last Year
1,311,487,077.00 907,006,505.05 96,480,911.29 61,469,258.27 2,858,664,147.39 5,042,146,076.42 5,042,146,076.42
Plus:
Alternation to
accounting
policies
Correction to
previous
errors
Business
combinations
involving
enterprises
under
common
C&S Paper Co., Ltd. Semi-annual Report 2021
86
control
Others
II. Balance at
the Beginning
of the Year
1,311,487,077.00 907,006,505.05 96,480,911.29 61,469,258.27 2,858,664,147.39 5,042,146,076.42 5,042,146,076.42
III. Changes in
the Period (“-”
Indicates
Decrease)
-443,106.00 34,619,056.03 502,873,236.77 278,409,787.74 -190,287,499.00 1,083,330.20 -189,204,168.80
i. Total
comprehensiv
e income
407,161,317.15 407,161,317.15 -16,669.80 407,144,647.35
ii. Capital
contributed or
decreased by
owner
-443,106.00 34,619,056.03 502,873,236.77 -468,697,286.74 1,100,000.00 -467,597,286.74
1 Ordinary
shares
contributed by
owners
1,578,199.00 15,730,354.61 17,308,553.61 1,100,000.00 18,408,553.61
2 Capital
contributed by
owners of
other equity
instruments
3 Share based
payments
recognized as
owner’s equity
-2,021,305.00 18,888,701.42 -29,732,395.14 46,599,791.56 46,599,791.56
4 Others 532,605,631.91 -532,605,631.91 -532,605,631.91
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87
iii. Profit
distribution -128,751,529.41 -128,751,529.41 -128,751,529.41
1
Appropriation
of surplus
reserves
2
Appropriation
of general risk
reserves
3 Distribution
to owners (or
shareholders)
-128,751,529.41 -128,751,529.41 -128,751,529.41
4 Others
iv. Interior
balance from
owner’s equity
1 Added
capital (or
share capital)
from capital
reserves
2 Added
capital (or
share capital)
from surplus
reserves
3
Compensation
of loss with
surplus
reserves
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88
4 Retained
earnings of
carry-over of
the defined
benefit plan
5 Retained
earnings of
carry-over of
other
comprehensiv
e income
6 Others
v. Special
reserves
1
Appropriation
for the period
2 Use for the
period
vi. Others
IV. Closing
Balance of the
Period
1,311,043,971.00 941,625,561.08 599,354,148.06 61,469,258.27 3,137,073,935.13 4,851,858,577.42 1,083,330.20 4,852,941,907.62
C&S Paper Co., Ltd. Semi-annual Report 2021
89
Amount of last period
Unit: RMB
Item
Half-Year of 2020
Owner’s equity attributable to the Parent Company
Equity of
minority
shareholders
Total owner’s
equity Share capital
Other equity
instruments Capital reserve
Less: Treasury
shares
Other
compr
ehensi
ve
incom
e
Specia
l
reserv
es
Surplus
reserves
Gener
al
reserv
es
Retained earnings Others Subtotal
Pref
eren
ce
shar
es
Perp
etual
bond
s
Othe
rs
I. Balance at
the End of
Last Year
1,308,891,273.00 760,731,416.57 104,792,649.00 53,205,582.86 2,058,968,835.80 4,077,004,459.23 4,077,004,459.23
Plus:
Alternation to
accounting
policies
Correction to
previous
errors
Business
combinations
involving
enterprises
under
common
control
C&S Paper Co., Ltd. Semi-annual Report 2021
90
Others
II. Balance at
the Beginning
of the Year
1,308,891,273.00 760,731,416.57 104,792,649.00 53,205,582.86 2,058,968,835.80 4,077,004,459.23 4,077,004,459.23
III. Changes in
the Period (“-”
Indicates
Decrease)
1,788,786.00 97,621,072.22 -1,072,825.04 354,753,498.45 455,236,181.71 455,236,181.71
i. Total
comprehensiv
e income
452,699,484.61 452,699,484.61 452,699,484.61
ii. Capital
contributed or
decreased by
owner
1,788,786.00 97,621,072.22 -1,072,825.04 100,482,683.26 100,482,683.26
1 Ordinary
shares
contributed by
owners
2,591,508.00 19,622,899.06 22,214,407.06 22,214,407.06
2 Capital
contributed by
owners of
other equity
instruments
3 Share based
payments
recognized as
owner’s equity
-802,722.00 77,998,173.16 -28,753,546.80 105,948,997.96 105,948,997.96
4 Others 27,680,721.76 -27,680,721.76 -27,680,721.76
iii. Profit
distribution -97,945,986.16 -97,945,986.16 -97,945,986.16
1
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91
Appropriation
of surplus
reserves
2
Appropriation
of general risk
reserves
3 Distribution
to owners (or
shareholders)
-97,945,986.16 -97,945,986.16 -97,945,986.16
4 Others
iv. Interior
balance from
owner’s equity
1 Added
capital (or
share capital)
from capital
reserves
2 Added
capital (or
share capital)
from surplus
reserves
3
Compensation
of loss with
surplus
reserves
4 Retained
earnings of
carry-over of
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92
the defined
benefit plan
5 Retained
earnings of
carry-over of
other
comprehensiv
e income
6 Others
v. Special
reserves
1
Appropriation
for the period
2 Use for the
period
vi. Others
IV. Closing
Balance of the
Period
1,310,680,059.00 858,352,488.79 103,719,823.96 53,205,582.86 2,413,722,334.25 4,532,240,640.94 4,532,240,640.94
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
Item
Half-Year of 2021
Share capital
Other equity instruments
Capital reserve Less: Treasury
shares
Other
comprehensive
income
Special
reserves Surplus reserves
Retained
earnings Others
Total owner’s
equity Preferen
ce
Perpetua
l bonds Others
C&S Paper Co., Ltd. Semi-annual Report 2021
93
shares
I. Balance at the End of
Last Year 1,311,487,077.00 831,693,206.19 96,480,911.29 61,347,923.99 157,409,974.07 2,265,457,269.96
Plus: Alternation to
accounting policies
Correction to
previous errors
Others
II. Balance at the
Beginning of the Year 1,311,487,077.00 831,693,206.19 96,480,911.29 61,347,923.99 157,409,974.07 2,265,457,269.96
III. Changes in the Period
(“-” Indicates Decrease) -443,106.00 29,583,893.72 502,873,236.77 333,383,264.36 -140,349,184.69
i. Total comprehensive
income 462,134,793.77 462,134,793.77
ii. Capital contributed or
decreased by owner -443,106.00 29,583,893.72 502,873,236.77 -473,732,449.05
1 Ordinary shares
contributed by owners 1,578,199.00 15,730,354.61 17,308,553.61
2 Capital contributed by
owners of other equity
instruments
3 Share based payments
recognized as owner’s
equity
-2,021,305.00 13,853,539.11 -29,732,395.14 41,564,629.25
4 Others 532,605,631.91 -532,605,631.91
iii. Profit distribution -128,751,529.41 -128,751,529.41
1 Appropriation of
surplus reserves
2 Distribution to owners
(or shareholders) -128,751,529.41 -128,751,529.41
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3 Others
iv. Interior balance from
owner’s equity
1 Added capital (or share
capital) from capital
reserves
2 Added capital (or share
capital) from surplus
reserves
3 Compensation of loss
with surplus reserves
4 Retained earnings of
carry-over of the defined
benefit plan
5 Retained earnings of
carry-over of other
comprehensive income
6 Others
v. Special reserves
1 Appropriation for the
period
2 Use for the period
vi. Others
IV. Closing Balance of
the Period 1,311,043,971.00 861,277,099.91 599,354,148.06 61,347,923.99 490,793,238.43 2,125,108,085.27
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95
Amount of last period
Unit: RMB
Item
Half-Year of 2020
Share capital
Other equity instruments
Capital reserve Less: Treasury
shares
Other
comprehensive
income
Special
reserves
Surplus
reserves
Retained
earnings Others
Total owner’s
equity Preferen
ce
shares
Perpetua
l bonds Others
I. Balance at the
End of Last Year 1,308,891,273.00 690,241,724.38 104,792,649.00 53,084,248.58 180,966,989.79 2,128,391,586.75
Plus:
Alternation to
accounting policies
Correction
to previous errors
Others
II. Balance at the
Beginning of the
Year
1,308,891,273.00 690,241,724.38 104,792,649.00 53,084,248.58 180,966,989.79 2,128,391,586.75
III. Changes in the
Period (“-” Indicates
Decrease)
1,788,786.00 91,049,055.52 -1,072,825.04 15,565,833.02 109,476,499.58
i. Total
comprehensive
income
113,511,819.18 113,511,819.18
ii. Capital
contributed or
decreased by owner
1,788,786.00 91,049,055.52 -1,072,825.04 93,910,666.56
1 Ordinary shares
contributed by
owners
2,591,508.00 19,622,899.06 22,214,407.06
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96
2 Capital
contributed by
owners of other
equity instruments
3 Share based
payments
recognized as
owner’s equity
-802,722.00 71,426,156.46 -28,753,546.80 99,376,981.26
4 Others 27,680,721.76 -27,680,721.76
iii. Profit
distribution -97,945,986.16 -97,945,986.16
1 Appropriation of
surplus reserves
2 Distribution to
owners (or
shareholders)
-97,945,986.16 -97,945,986.16
3 Others
iv. Interior balance
from owner’s equity
1 Added capital (or
share capital) from
capital reserves
2 Added capital (or
share capital) from
surplus reserves
3 Compensation of
loss with surplus
reserves
4 Retained earnings
of carry-over of the
defined benefit plan
5 Retained earnings
of carry-over of
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97
other
comprehensive
income
6 Others
v. Special reserves
1 Appropriation for
the period
2 Use for the period
vi. Others
IV. Closing Balance
of the Period 1,310,680,059.00 781,290,779.90 103,719,823.96 53,084,248.58 196,532,822.81 2,237,868,086.33
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III. Basic Information of the Company
1. Development history of the Company
C&S Paper Co., Ltd. (hereinafter referred to as “the Company”) is a joint stock limited company restructured from
Zhongshan Zhongshun Paper Manufacturing Co., Ltd., with all shareholders of the original company as its
initiators. The Company has obtained a business license of enterprise legal person with the registration number of
442000400013713 issued by Guangdong Province Administration for Industry and Commerce on December 31,
2008.
In November 2010, under the approval of the Notice on the Approval of the Initial Public Offering of Shares of
C&S Paper Co., Ltd. (CSRC Xu Ke [2010] No. 1539) issued by China Securities Regulatory Commission, the
Company issued 40,000,000 RMB-denominated ordinary shares (A shares) to the public, each having a par value
of RMB1. The share capital after the public offering was RMB160,000,000.00.
On May 22, 2012, the Company held the 2011 Annual General Meeting of Shareholders and approved the
Proposal on the 2011 Profit Distribution Plan, applying for an increase of registered capital by
RMB48,000,000.00. With the base number of 160,000,000.00 total shares as at the end of 2011, the Company
planned to convert capital reserve into new shares on the basis of three shares for every ten existing shares. The
registered capital after the change was RMB208,000,000.00.
On June 3, 2013, the Company held the 2012 Annual General Meeting of Shareholders and approved the Proposal
on the 2012 Profit Distribution Plan, applying for an increase of registered capital by RMB104,000,000.00. With
the base number of 208,000,000.00 total shares as at the end of 2012, the Company planned to convert capital
reserve into new shares on the basis of five shares for every ten existing shares. The registered capital after the
change was RMB312,000,000.00.
On May 8, 2014, the Company held the 2013 Annual General Meeting of Shareholders and approved the Proposal
on the 2013 Profit Distribution Plan, applying for an increase of registered capital by RMB93,600,000.00. With
the base number of 312,000,000.00 total shares as at the end of 2013, the Company planned to convert capital
reserve into new shares on the basis of three shares for every ten existing shares. The registered capital after the
change was RMB405,600,000.00.
On May 8, 2015, the Company held the 2014 Annual General Meeting of Shareholders and approved the Proposal
on the 2014 Profit Distribution Plan, applying for an increase of registered capital by RMB81,120,000.00. With
the base number of 405,600,000 total shares as at the end of 2014, the Company planned to convert capital reserve
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into new shares on the basis of two shares for every ten existing shares. The registered capital after the change was
RMB486,720,000.00.
Pursuant to the resolutions of the 7th meeting of the third session of the Board of Directors, the 9th meeting of the
third session of the Board of Directors, the third extraordinary general meeting of 2015 and the 10th meeting of
the third session of the Board of Directors, the Company planned to grant 17,133,000 restricted RMB-
denominated ordinary shares (A shares) to 242 incentive recipients including Liu Jinfeng through private
placement, with a par value of RMB1 per share and a grant price of RMB4.25 per share. Upon completion,
16,957,000 restricted RMB-denominated ordinary shares (A shares) were actually granted to a total of 199
incentive recipients with 43 employees withdrawing from the plan. The registered capital after the change was
RMB503,677,000.00.
Pursuant to the resolutions of the third extraordinary general meeting of 2015, the 11th meeting of the third
session of the Board of Directors and the 9th meeting of the third session of the Board of Supervisors, the
Company planned to grant 1,867,000 restricted RMB-denominated ordinary shares (A shares) to 68 incentive
recipients including Duan Xianglei through private placement, with a par value of RMB1 per share and a grant
price of RMB4.80 per share. Upon completion, 1,847,000 restricted RMB-denominated ordinary shares (A shares)
were granted to a total of 54 incentive recipients with 14 employees withdrawing from the plan. The registered
capital after the change was RMB505,524,000.00.
On October 24, 2016, at the 15th meeting of the third session of the Board of Directors, the Proposal on the
Repurchase and Deregistration of Partial Restricted Stocks under the Company’s Restricted Stock Incentive Plan
and Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company were
reviewed and approved. Pursuant to the resolution of the meeting of the Board of Directors, the Company applied
for the repurchase and deregistration of 266,000 restricted stocks. Among them, the repurchase price of restricted
stocks awarded in the first grant was RMB4.25 per share, the repurchase price of reserved restricted stocks was
RMB4.80 per share, and the registered capital after the change was RMB505,258,000.00.
On May 10, 2017, the Company held the 2016 Annual General Meeting of Shareholders and approved the
Proposal on the 2016 Profit Distribution Plan, applying for an increase of registered capital by
RMB252,629,000.00. With the base number of 505,258,000 total shares as at the end of 2016, the Company
planned to convert capital reserve into new shares on the basis of five shares for every ten existing shares. The
registered capital after the change was RMB757,887,000.00.
Pursuant to the resolutions of the 22nd and 24th meeting of the third session of the Board of Directors in 2017, as
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some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the
appraisal, the Company planned to repurchase and deregister the restricted stocks of 35 incentive recipients.
Among them, 25 incentive recipients were granted in the first period with 382,462.50 restricted stocks and ten
incentive recipients were granted with 39,997.50 reserved restricted stocks. A total of 422,460 shares were
repurchased and deregistered. The registered capital after the reduction was RMB757,464,540.00.
On May 8, 2018, the Company held the 2017 Annual General Meeting of Shareholders and approved the Proposal
on the 2017 Profit Distribution Plan, applying for an increase of registered capital by RMB530,225,178.00. With
the base number of 757,464,540 total shares as at the end of 2016, the Company planned to convert capital reserve
into new shares on the basis of seven shares for every ten existing shares. The registered capital after the change
was RMB1,287,689,718.00.
Pursuant to the resolution of the 5th meeting of the fourth session of the Board of Directors in 2018, as some
incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal at
the second unlocking period under the Restricted Stock Incentive Plan, the Company planned to repurchase and
deregister the restricted stocks of 46 incentive recipients. Among them, 38 incentive recipients were granted in the
first period with 985,426 restricted stocks and ten incentive recipients were granted with 11,551 reserved
restricted stocks. A total of 996,977 shares were repurchased and deregistered. The registered capital after the
reduction was RMB1,286,692,741.00.
Pursuant to the resolutions of the 9th meeting of the fourth session of the Board of Directors and the first
extraordinary general meeting in 2019, the Company planned to grant 21,717,500 restricted RMB-denominated
ordinary shares (A shares) to 671 incentive recipients including Dong Ye through private placement, with a par
value of RMB1 per share. Wherein, 19,675,500 restricted RMB-denominated ordinary shares (A shares) were
granted to a total of 569 incentive recipients at the price of RMB4.33, with 102 employees withdrawing from the
plan. The registered capital after the change was RMB1,306,368,241.00.
Pursuant to the resolutions of the 12th and 13th meeting of the fourth session of the Board of Directors, as some
incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal,
the Company planned to repurchase and deregister the restricted stocks of 32 incentive recipients. Among them,
22 incentive recipients were granted in the first period with 211,803 restricted stocks and ten incentive recipients
were granted with 56,865 reserved restricted stocks. A total of 268,668 shares were repurchased and deregistered.
The registered capital after the reduction was RMB1,306,099,573.00.
Pursuant to the Proposal on Granting Reserved Stock Options and Restricted Stocks to Incentive Recipients
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reviewed and approved at the 16th meeting of the fourth session of the Board of Directors in 2019, the Company
planned to grant 64 incentive recipients with 3,500,000 restricted stocks with a grant price of RMB7.02 per share.
The incentive plan actually granted 46 incentive recipients with 2,791,700 restricted ordinary shares as 18
incentive recipients did not subscribe for the restricted stocks due to resignation or voluntary abandonment and 13
incentive recipients did not fully pay for the subscribed restricted stocks. The registered capital after the grant was
RMB1,308,891,273.00.
The 23rd meeting of the fourth session of the Board of Directors and the second extraordinary general meeting of
2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks
Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant
to the proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company
or failing the appraisal or some recipients passed the appraisal but did not attain a full score and hence could not
unlock all the stocks, the Company decided to repurchase and deregister total 802,722 restricted shares of 241
incentive recipients. The registered capital after the reduction was RMB1,308,088,551.00.
The 28th meeting of the fourth session of the Board of Directors and the fifth extraordinary general meeting of
2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Reserved Restricted
Stocks under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant to the proposal, as
some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the
appraisal or some recipients passed the appraisal but did not attain a full score and hence could not unlock all the
stocks, the Company decided to repurchase and deregister total 211,890 restricted shares of 24 incentive recipients.
The registered capital after the reduction was RMB1,307,876,661.00.
At the 23rd meeting of the fourth session of the Board of Directors, the Proposal on Achieving the Exercise
Conditions of the First Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018
Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal agreed that the
exercise conditions under the first exercise period for the stock options awarded in the first grant had been met as
set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft), and the exercise method was
independent exercise. The number of incentive recipients in conformity with the exercise conditions reached
2,522 and the number of stock options that had met exercise conditions was 3,431,505. The exercise period was
from June 10, 2020 to February 26, 2021. At the 28th meeting of the fourth session of the Board of Directors, the
Proposal on Achieving the Exercise Conditions of the First Exercise Period for Reserved Stock Options under the
Company’s 2018 Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal
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agreed that the exercise conditions under the first exercise period for the reserved stock options had been met as
set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft), and the exercise method was
independent exercise. The number of incentive recipients in conformity with the exercise conditions reached 88
and the number of stock options that have met exercise conditions was 640,389. The exercise period was from
November 17, 2020 to September 10, 2021. As of December 31, 2020, the incentive recipients who had met the
above exercise conditions have successively begun to exercise their rights, and a total of 3,610,416 shares have
been subscribed.
As at December 31, 2020, the Company has had a registered capital of RMB1,311,487,077.00 and a share capital
of RMB1,311,487,077.00.
At the 5th meeting of the fifth session of the Board of Directors and the third meeting of the fifth session of the
Board of Supervisors, the Proposal on Achieving the Exercise Conditions of the Second Exercise Period for Stock
Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
was reviewed and approved. The proposal agreed that the exercise conditions under the second exercise period for
the stock options awarded in the first grant had been met as set out in the 2018 Stock Option and Restricted Stock
Incentive Plan (Draft), and the exercise method was independent exercise. The number of incentive recipients in
conformity with the exercise conditions reached 2,274 and the number of stock options that had met exercise
conditions was 2,948,559. The exercise period was from June 30, 2021 to February 28, 2022. As of December 31,
2021, the incentive recipients who had met the above exercise conditions have successively begun to exercise
their rights, and a total of 1,578,199 shares have been subscribed.
The 5th meeting of the fifth session of the Board of Directors and the fourth extraordinary general meeting of
2021 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks
Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. At the
second unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and Restricted
Stock Incentive Plan, 35 incentive recipients were disqualified since they left the Company before the unlock,
with 1,993,600 restricted shares that had been granted but unlocked; 61 incentive recipients passed the personal
appraisal but did not attain a full score and hence could not unlock all the stocks, with 27,705 shares unable to be
locked. In June 2021, repurchase and deregistration payments were made to relevant personnel whose shares
needed to be repurchased and deregistered, and the follow-up repurchase and deregistration procedures and
procedures for changing with the industrial and commercial department are in process.
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2. Registered address, form of organization, and headquarters of the Company
Form of organization: Company limited by shares
Registered address: No. 1 Longcheng Road, Dongsheng Town, Zhongshan City
Office address of the headquarters of the Company: No. 136 Caihong Avenue, West District, Zhongshan City
3. Business nature and main business activities of the Company
C&S Paper Co., Ltd. and its subsidiaries (hereafter generally referred to as “the Company”) are in the household
paper industry. The Company mainly engages in the following: R&D, production, processing and sales (including
online sales): high-end household paper series products, tissue boxes, sanitary products, cosmetics, non-woven
products, daily necessities (limited to daily plastic products, daily metal products, daily rubber products, and daily
ceramic products), daily chemical products (excluding hazardous chemicals), and Class I medical devices;
operation and production of Class II and Class III medical devices.
4. Actual controller of the Company
The actual controllers of the Company are Deng Yingzhong, Deng Guanbiao, and Deng Guanjie (Deng Yingzhong
is the other two’s father).
5. Approver for the issue of the financial statements and date of approval
The financial statements were approved for issue by the Board of Directors of the Company on August 30, 2021.
6. Scope of the consolidation of financial statements
As of June 30, 2021, the Company has 23 subsidiaries which are included in the consolidated scope, as detailed in
“Note IX. Equities in Other Entities”. Compared with last year, four subsidiaries have been newly added into the
consolidated scope during the reporting period. For details, see “Note VIII. Changes in Consolidated Scope”.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The financial statements of the Company have been prepared on a going concern basis based on actual
transactions and events and according to the Accounting Standards for Business Enterprises - Basic Standards
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promulgated by the Ministry of Finance (MOF No. 33 Document and No. 76 Revision), the 42 accounting
standards, Guidelines for the Application of the Accounting Standards for Business Enterprises, interpretation to
the accounting standards for business enterprises and other relevant regulations that are successively promulgated
on or after February 15, 2006 (hereinafter collectively referred to as “Accounting Standards for Business
Enterprises”), and rules set out in No. 15 Preparation and Reporting Rules of Information Disclosure of Public
Offering Companies - General Rules for Financial Statements (2014 Revision) issued by China Securities
Regulatory Commission based on actual transactions and events.
In accordance with the relevant rules of Accounting Standards for Business Enterprises, the financial accounting
of the Company is based on accrual basis. Apart from some financial tools, the accounting measurement of the
financial statements is based on historical cost method. Provision for impairment of asset is set aside if it is
recognized.
2. Going concern
The Company shall be a going concern for at least 12 months following the end of the reporting period. There are
no major events that will affect the Company’s operational ability; therefore the assumption on which the financial
statements are based is reasonable.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates:
C&S Paper Co., Ltd. and all its subsidiaries have set out several specific accounting policies and accounting
estimates for transactions and events with relation to the recognition of incomes and income taxes in accordance
with the Accounting Standards for Business Enterprises and their own operational characteristics. Please refer to
“Note V (39) Revenue” for details. As for explanations of significant accounting judgments and estimates made
by the management, please refer to “Note V (44) Significant changes of accounting policies and accounting
estimates”.
1. Statement of compliance with the accounting standards for business enterprises
The financial statements of the Company conform to the requirements set out in the Accounting Standards for
Business Enterprises. The statements truthfully and completely reflect the financial status, operating results, cash
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flow, and other relevant information of the Company. In addition, the financial statements of the Company are
also in accordance with disclosure requirements for financial statements and notes in No. 15 Preparation and
Reporting Rules of Information Disclosure of Public Offering Companies - General Rules for Financial
Statements of the China Securities Regulatory Commission (2014 Revision) in all material aspects
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company normally refers to the periods during which the Company purchases assets
for processing and then gets cash or cash equivalents from the processed items. Normally, the operating cycle of a
company is shorter than a year. The Company sets 12 months as a full operating cycle and uses the 12-month
period as a standard for the liquidity of assets and liabilities.
4. Standard currency for accounting
RMB is the main currency in the main economic environments in which the Company and its domestic
subsidiaries operate. Therefore, the Company and its subsidiaries use RMB as the standard currency for
bookkeeping. The currency for accounting used in the Company’s financial statements is RMB.
5. Accounting treatment measures of business combinations involving enterprises under common control
and business combinations involving enterprises not under common control
Business combinations refer to the combination of two or more independent enterprises to form a reporting entity
of transactions or events. Business combination can be classified as business combinations involving enterprises
under common control and business combinations involving enterprises not under common control.
(1) Business combinations involving enterprises under common control
Business combinations under common control means enterprises involved in the business combination are under
ultimate control by one party or the same multi-parties before and after combination, and such control is not
temporary. For business combinations under common control, those who obtain control of enterprises involved in
the business combination on the combination date are the acquirer while other enterprises involved in the business
combination are the acquiree. Combination date is the date that the combining party actually obtains control of the
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combined party.
Assets and liabilities that the acquirer gets from the acquiree are calculated and measured at the book values on
the combination date. If there are differences between the book values of the net assets the acquirer receives and
the book values of the combination consideration it pays (or the face values of the issued shares), the differences
will be used to adjust capital reserves (share premium). Where capital reserves (share premium) are insufficient to
offset, retained earnings shall be adjusted.
All direct expenses related to the business combinations paid by the acquirer shall be included in current profits
and losses upon occurrence.
(2) Business combinations involving enterprises not under common control
Business combinations not under common control means enterprises involved in the business combination are not
under ultimate control by one party or the same multi-parties before and after combination. For business
combinations not under common control, those who obtain control of enterprises involved in the business
combination on the acquisition date are the acquirer, while other enterprises involved in the business combination
are the acquiree. Acquisition date is the date that the acquirer actually obtains control of the acquiree.
For business combinations not under common control, the costs of combination include the assets the acquirer
pays, liabilities the acquirer bears, and the fair value of the equity securities issued on the date of combination for
the acquisition of control over the acquiree. The costs of auditing, legal services, evaluation consulting, other
intermediary expenses and other management fees incurred for business combination shall be included in current
profits and losses. The transaction costs of the equity securities and debt securities issued by the acquirer shall be
included in the initially confirmed amounts of equity securities and debt securities. The contingent consideration
involved shall be included in the costs of business combination based on its fair value at the acquisition date. If,
within 12 months after the acquisition, there is new or further evidence for conditions that have already existed on
the acquisition date and the contingent consideration shall be re-adjusted, the combination goodwill shall be
adjusted accordingly. The acquirer’s costs of business combinations and its identifiable net assets obtained from
business combinations shall be assessed at the fair values on the acquisition date. If the costs of business
combinations are higher than the identifiable net assets of the acquiree on the acquisition date, the gap between
them shall be confirmed as goodwill. If the costs of business combinations are lower than the fair values of the
identifiable net assets of the acquiree on the acquisition date, the fair values of identifiable assets, liabilities and
continent liabilities as well as the measurement of combination costs shall be reassessed; if, upon reassessment,
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the business combination costs are still lower than the fair values of the identifiable net assets of the acquiree, the
difference shall be included in profits and losses of the current period.
If the deductible temporary differences the acquirer gets from the acquiree are not eligible to be confirmed as
deferred tax asset on the acquisition date, and within 12 months of the acquisition, there are new or further
evidence for the conditions that have already existed on the acquisition date that the economic profits brought by
the deductible temporary differences of the acquiree could be achieved, such differences shall be confirmed as
deferred tax asset. At the same time, the goodwill shall be reduced. Where the goodwill is insufficient to be
deducted, the gap between them shall be included in current profits and losses. Apart from the aforementioned
situations, all deductible temporary differences confirmed to be relevant to the business combination shall be
recorded in current profits and losses.
For business combinations not under common control that are achieved through multiple steps, whether they can
be regarded as package deals shall be judged in accordance with Notice No.5 of the Interpretation of Accounting
Standards for Business Enterprises of the Ministry of Finance (C.K. [2012] No.19), and the standards of “package
deals” set out in Article 51 of the Accounting Standard for Business Enterprises No. 33 – Consolidated Financial
Statements (please refer to Note V (6) “methods for preparation of consolidated financial statements” (2)). In the
event that the combination is regarded as “package deals”, accounting treatment shall be done by referring to the
descriptions in previous paragraphs of this section and “Note V (22) Long-term equity investments” herein; if not,
accounting treatment shall be done by distinguishing individual financial statements from consolidated financial
statements::
In individual financial statements, the initial investment costs shall be the sum of the book value of the equity
investment of the acquiree held before the acquisition date and the new investment costs on the acquisition date; if
other comprehensive income is involved in the equities of the acquiree before the acquisition date, accounting
processing shall be done for the comprehensive income related to this investment by adopting the same basis for
directly disposing of relevant assets or liabilities of the acquiree during the disposal of this investment (that is,
except for the corresponding shares of the changes caused by re-measurement of the net liabilities or net assets of
the defined benefit plan by the acquiree, which are accounted by the equity method, others shall be transferred to
the return on investment of the current period).
In consolidated financial statements, the equities of the acquiree held before the acquisition date shall be re-
measured at the fair value of the equities on the acquisition date, and the difference between the fair value and the
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book value shall be recognized as the return on investment of the current period; if other comprehensive income is
involved in the equities of the acquiree before the acquisition date, accounting processing shall be done for the
comprehensive income related to this investment by adopting the same basis for directly disposing of relevant
assets or liabilities of the acquiree (that is, except for the corresponding shares of the changes caused by re-
measurement of the net liabilities or net assets of the defined benefit plan by the acquiree, which are accounted by
the equity method, others shall be transferred to the return on investment of the current period).
6. Methods for preparation of consolidated financial statements
(1) Principles of determining the scope of consolidated financial statements
The scope of consolidation of consolidated financial statements shall be subject to the basis of control. Control
refers to the power the investor owns against the investee, which allows the investor to enjoy the variable return
by attending relevant activities held by the investee, and to be capable of using such power to affect the amount of
return. The scope of consolidation is the Company and all of its subsidiaries. Subsidiaries refer to entities
controlled by the Company.
The Company shall reassess whether it controls an investee if facts and circumstances indicate that there are
changes to the relevant elements of control as defined above.
(2) Methods for preparation of consolidated financial statements
The Company shall include the subsidiaries in the scope of consolidation from the date it acquires the actual
control over the net assets and the decision-making of production and operations of such subsidiaries; accordingly,
the Company shall terminate including them in the scope of consolidation from the date it loses the actual control.
In terms of subsidiaries already disposed of, the operating results and cash flows before the disposal date have
been included in the consolidated income statements and the consolidated cash flow statements appropriately; as
for subsidiaries disposed in the current period, the opening balance in the consolidated balance sheet shall not be
adjusted. In case of subsidiaries added through business combinations not under the same control, the operating
results and cash flows after the acquisition date have been included in the consolidated income statements and the
consolidated cash flow statements appropriately, and the opening and comparative balance in the consolidated
balance sheet shall not be adjusted. In case of subsidiaries added through business combinations under the same
control among which the Company absorbs the combined party, the operating results and cash flows of the
combined party from the beginning of the period in which the combination happens to the combination date have
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been included in the consolidated income statements and the consolidated cash flow statements appropriately, and
the comparative balance in the consolidated balance sheet shall be adjusted simultaneously.
In case of inconsistencies in the accounting policies or periods between subsidiaries and the Company during
preparation of consolidated financial statements, financial statements of subsidiaries shall be adjusted according to
the accounting policies and periods adopted by the Company. For subsidiaries acquired by business combinations
not under the same control, their financial statements shall be adjusted based on the fair value of the identifiable
net assets on the acquisition date.
All major business transaction balance, transactions, and unrealized profit of the Company shall be offset during
preparation of consolidated financial statements.
Shareholders’ equities of subsidiaries and the part of the net profit and loss of the current period not attributable to
the Company shall be presented separately under the shareholders’ equities and the net profit in the consolidated
financial statements as equities of minority shareholders and minority shareholders’ profits and losses. Shares of
equities of minority shareholders in the net profit and loss of the current period of subsidiaries shall be presented
under the “minority shareholders’ profits and losses” in the consolidated income statement. If the loss of a
subsidiary which is shared by its minority shareholders exceeds the minority shareholders’ share in the opening
balance of the subsidiary, the minority interest shall be reduced.
If the Parent Company loses control of a subsidiary due to partial disposal of equity investment or other reasons, it
shall re-measure the remaining equity at fair value on the date of loss of control. The sum of consideration
obtained from equity disposal and fair value of the remaining equity, minus the difference between the Parent
Company’s share of the subsidiary’s net assets that is continuously calculated from the acquisition date, shall be
recognized as investment income for the reporting period when the loss of control takes place. Accounting
processing shall be done for the other comprehensive income related to this investment in the subsidiary’s equities
by adopting the same basis for directly disposing of relevant assets or liabilities of the acquiree during the loss of
control (that is, except for the changes caused by re-measurement of the net liabilities or net assets of the defined
benefit plan by the previous subsidiary, others shall be transferred to the return on investment of the current
period). After that, subsequent measurement shall be done for the remaining equity of this part as per relevant
provisions in the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment or the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
See “Note V (22)” or “Note V (10)” for details.
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If the Company disposes of investments in a subsidiary’s equities by steps via transactions until it loses control, it
shall check whether these transactions from disposal of the investments in the subsidiary’s equities to the loss of
control are package deals. If the terms, conditions, and economic effects of transactions on disposing of equity
investment in the subsidiary conform to one or more of the following circumstances, that means these multiple
transactions should be treated as package deals in accounting processing: 1) Those transactions are reached at the
same time or after taking into consideration the influence of each other; 2) those transactions together produce a
complete commercial outcome; 3) the occurrence of one transaction depends on the occurrence of at least one
other transaction; 4) one transaction alone does not seem to be economical, but all those transactions are
economical when are considered as a whole. If those transactions are package deals, each transaction shall be
treated as a transaction that results in loss of control of the subsidiary in accounting processing. However, the
difference between each disposal price before loss of control and the Parent Company’s share of the subsidiary’s
net assets corresponding to the disposal investment shall be recognized as other comprehensive income in the
consolidated financial statements and, upon loss of control, transferred to the profit and loss of the current
reporting period.
7. Classification of joint operation arrangements and accounting treatment methods for joint operations:
None
8. Criteria for recognition of cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits that can be used for payment at any time, and short-term
(due within three months from the acquisition date) investment held by the Company with high liquidity, easy to
convert to cash in a known amount, and small risk of value changes.
9. Translation of transactions and financial statements denominated in foreign currencies
(1) Methods for translation of transactions denominated in foreign currencies
At the initial recognition of foreign currency transactions of the Company, foreign currency will be translated into the
amount of standard currency for accounting at the spot exchange rate or its approximate exchange rate on the
transaction date. However, the business of exchange of foreign currencies or transactions related to the exchange of
foreign currencies, foreign currency will be translated into the amount of standard currency for accounting at the
exchange rate actually adopted.
(2) Methods for translation of monetary and non-monetary items in foreign currencies
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On the balance sheet date, the foreign currency monetary items are translated at the spot exchange rate on that
date. Exchange difference resulting from the difference between the spot exchange rate on the balance sheet date
and that at the initial recognition or on the previous balance sheet date shall be recognized as the profit and loss of
the current period.
Non-monetary items that are measured at historical cost in foreign currencies shall still be converted at the spot
exchange rate on the transaction date with the amount of standard currency for accounting unchanged. Non-
monetary items that are measured at fair value in foreign currencies are translated using the foreign exchange rate
at the date the fair value is recognized. The difference between the amount of standard currency for accounting
after translation and the original amount of the standard currency for accounting shall be treated as a change in
fair value (including the change in the exchange rate) and recognized as the profit and loss of the current period or
other comprehensive income.
(3) Methods for translation of foreign-currency financial statements
Foreign-currency financial statements of overseas operations shall be translated into RMB financial statements by the
following methods: The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the
balance sheet date; except “undistributed profits”, all the other owner’s equity items are converted at the spot exchange
rate at the time of occurrence. Income and expense items in the income statement shall be translated using the foreign
exchange rates ruling at the dates of the transactions. Difference resulting from translation of foreign-currency financial
statements by the above methods shall be recognized as other comprehensive income. Translation of comparative
financial statements shall be subject to the above provisions.
10. Financial instruments
When the Company becomes a party to a financial instrument contract, the financial instrument is confirmed to be
either financial assets or financial liabilities.
(1) Classification, recognition, and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics of
financial assets, the Company classified financial assets into the following categories: financial assets measured at
the amortized cost, financial assets measured at fair value through other comprehensive income and financial
assets measured at fair value through profit and loss of the current period.
Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value
through profit and loss of the current period, transaction costs are directly included in profit and loss of the current
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period. For other types of financial assets, related transaction costs are included in their initial recognized amounts.
In terms of the accounts receivable or notes receivable arising from selling products or providing labor service
without or not considering major financing component, the Company shall regard the expected consideration
amount that it has rights to charge as the initial recognition amount.
1) Financial assets measured at amortized cost
For the business model where the Company manages the financial assets carried at amortized cost, the Company
aims to charge the contract cash flows, and the characteristics of the contract cash flows of this kind of financial
assets are consistent with the basic lending arrangements. That is, cash flows generated on specified dates are
solely payments of principal and interest on the principal amount outstanding. This kind of financial assets are
subsequently measured at amortized cost using the effective interest method. Gain or loss arising from
amortization or impairment is recognized in profit and loss of the current period.
2) Financial assets measured at fair value through other comprehensive income
The business model for the Company to manage this type of financial assets aims at both obtaining the contract
cash flows and selling the financial assets, and the characteristics of the contract cash flows of this kind of
financial assets are consistent with the basic lending arrangements. The Company measures this kind of financial
assets at fair value through other comprehensive income, but recognizes the impairment losses or gains, exchange
profit and loss, and interest income calculated by the effective interest method as the profit and loss of the current
period.
Additionally, the Company designates some non-tradable equity instruments as financial assets at fair value
through other comprehensive income. The Company recognizes relevant dividend income from such financial
assets as the profit and loss of the current period, and changes in fair value as other comprehensive income. When
such financial assets are derecognized, the accumulated gains or losses previously recognized as other
comprehensive income shall be transferred from other comprehensive income to retained earnings and not
recognized as the profit and loss of the current period.
3) Financial assets measured at fair value through profit and loss of the current period
All financial assets other than the other two preceding types are classified as financial assets measured at fair
value through profit and loss of the current period. Moreover, at initial recognition, to eliminate or significantly
reduce accounting mismatches, the Company may designate some financial assets as financial assets measured at
fair value through profit and loss of the current period.
Such financial assets shall be measured at fair value, and changes in fair value are recognized as the profit and
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loss of the current period.
(2) Classification, recognition, and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured at fair value through
profit or loss and other financial liabilities. For financial liabilities at fair value through profit and loss of the
current period, transaction costs are directly included in profit and loss of the current period. For other types of
financial liabilities, related transaction costs are included in their initial recognized amounts.
1) Financial liabilities measured at fair value through profit and loss of the current period
Financial liabilities measured at fair value through profit and loss of the current period include tradable financial
liabilities (including derivatives belonging to financial liabilities) and financial liabilities designated to be
measured at fair value through profit and loss of the current period at initial recognition.
Tradable financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fair
value, and changes in fair value -- except for those related to hedging accounting -- are recognized as profit and
loss of the current period.
For those that are designated as financial liabilities measured at fair value through profit or loss, the changes in
fair value resulting from changes in the credit risk of the Company shall be recognized as other comprehensive
income; besides, when such liabilities are derecognized, the amount of accumulative changes in fair value
resulting from credit risk changes that are recognized as other comprehensive income shall be transferred to
retained earnings. Other changes in fair value shall be recognized as the profit and loss of the current period. If the
treatment of the credit risk changes in such financial liabilities by the above methods will result in expansion of
the accounting mismatch in the profit and loss, the Company shall recognize all gains or losses in such financial
liabilities (including the amount subject to the credit risk changes of the Company) as the profit and loss of the
current period.
2) Other financial liabilities
Except for financial liabilities resulting from financial asset transfers not meeting the conditions for derecognition
or the continuous involvement in the transferred financial asset, or financial guarantee contracts, other financial
liabilities shall be classified into the financial liabilities measured at amortized cost, which shall be subsequently
measured at amortized cost, and the gains or losses resulting from derecognition or amortization shall be
recognized as the profit and loss of the current period.
(3) Recognition basis and measurement method of financial asset transfer
Once one of the following conditions is met, the financial assets shall be derecognized:
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1) The contract right to charge the cash flows of the financial assets is terminated; 2) the financial assets have been
transferred, and almost all the risks and rewards of the ownership of the financial assets are transferred to the
transferee; 3) the financial assets have been transferred, and the Company has given up the control over the
financial assets although it does not transfer or retain almost all the risks and rewards of the ownership of the
financial assets.
If the Company has neither transferred nor retained almost all the risks and rewards of the ownership of the
financial assets, and the Company does not waive its control of the financial assets, it shall recognize the relevant
financial assets within the extent of its continuous involvement in the transferred financial assets and recognize
the relevant liabilities. The continuous involvement in the transferred financial assets refers to the level of risk
with which the Company is faced due to changes in the financial asset values.
When overall transfer of financial assets meets the conditions for derecognization, the book value of the
transferred financial assets and the difference between the consideration received due to transfer and the
accumulative changes in fair value that is originally recognized as other comprehensive income shall be
recognized as the profit and loss of the current period.
When partial transfer of financial assets meets the conditions for derecognization, the book value of the
transferred financial assets shall be apportioned to the fair value between the derecognized part and the recognized
part, and the consideration received due to transfer and the difference between the accumulative changes in fair
value that is originally recognized as other comprehensive income, which shall be apportioned to the derecognized
part, and the apportioned book value as mentioned above shall be recognized as the profit and loss of the current
period.
When the Company sells financial assets with additional recourse or transfers the endorsed financial assets held, it
shall check whether almost all the risks and rewards of the ownership of the financial assets are transferred. If the
Company has transferred almost all the risks and rewards of the ownership of the financial assets to the transferee,
it shall derecognize the financial assets; if the Company retains almost all the risks and rewards of the ownership
of the financial assets, it shall not derecognize the financial assets; if the Company neither transfers nor retains
almost all the risks and rewards of the ownership of the financial assets, it shall judge whether it has retained
control over the assets and conduct accounting processing following the principles described in previous
paragraphs.
(4) Derecognition of financial liabilities
If current obligations of the financial liabilities (or some of the liabilities) have been released, the Company shall
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derecognize the financial liabilities (or some of the liabilities). Where the Company (borrower) and a lender sign
an agreement to replace the existing financial liability by way of assumption of new financial liability with the
terms of the new financial liability substantially different from those of the existing financial liability, it
derecognizes the existing financial liability while recognizing the new financial liability. If the contract terms of
the existing financial liability are materially changed in whole (or in part), the existing financial liability will be
derecognized, and the financial liability after changes of terms will be recognized as a new financial liability.
If a financial liability is derecognized in whole (or in part), the difference between the book value of the
derecognized portion and the consideration paid (including the non-cash assets transferred out or the new financial
liability assumed) is recognized as the profit and loss of the current period.
(5) Offsetting financial assets and financial liabilities
When the Company has the statutory right to offset the recognized amount of financial assets and financial
liabilities, and this statutory right is currently enforceable, and the Company plans to net the financial assets or
simultaneously realize the financial assets and pay off the financial liabilities, the financial assets and financial
liabilities are presented in the balance sheet at the net amount after offsetting each other. Otherwise, financial
assets and financial liabilities are presented separately in the balance sheet and are not offset against each other.
(6) Methods for determining the fair value of financial assets and financial liabilities
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. If there are active markets for a financial
instrument, the Company establishes its fair value by using quotes in the active markets. Quotes in active markets
refer to prices that are readily available on a regular basis from exchanges, brokers, trade associations, pricing
service institutions, etc., and represent the prices of market transactions that actually occur in a fair trade. If there
is no active market, the Company establishes fair value by using valuation techniques.
Valuation techniques include reference to price used in recent market transactions between knowledgeable, willing
parties, reference to the current fair value of other financial instruments that are substantially the same, discounted
cash flow analysis, option pricing models, etc. During valuation, the Company adopts the valuation techniques
that are applicable under current circumstances and supported by sufficient available data and other information,
selects the input values that are consistent with the characteristics of the assets or liabilities considered by the
market participants in the transaction of the relevant assets or liabilities, and preferentially uses the relevant
observable inputs. Unobservable input values are used where the relevant observable input values are not
available or are not practicable.
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(7) Equity instruments
An equity instrument refers to a contract that can prove the Company owns the remaining equity in the assets after
deducting all liabilities. The Company’s issuance (including refinancing), repurchase, sales or cancellation of
equity instruments are treated as changes in equities, and transaction costs related to equity transactions are
deducted from equities. The Company does not recognize changes in the fair value of equity instruments.
The distribution of dividends by equity instruments (including “interests” generated by instruments that are
classified as equity instruments) during their period existence shall be treated as profit distribution.
(8) Impairment of financial assets
The financial assets for which the Company needs to recognize impairment losses are financial assets measured at
amortized cost, debt instrument investments measured at fair value through other comprehensive income, and
lease receivables, mainly including notes receivable, accounts receivable, and other receivables. In addition, for
some financial guarantee contracts, impairment reserves are set aside and credit impairment losses are recognized
as per the accounting policies described in this section.
1) Methods for recognizing impairment reserves
Based on the expected credit loss, the Company sets aside provisions for impairment of the above items by
methods (general method or simplified method) for measuring expected credit loss applicable to them and
recognizes credit impairment loss.
Credit loss refers to the difference between all contract cash flow receivables discounted at the original effective
interest rate under the contract and all expected cash flow receivables, i.e., the present value of all cash shortages.
Specifically, for financial assets that have been credit-impaired at the time of purchase or origin, the Company
discounts the financial assets at the credit-adjusted actual interest rate.
The general method for measuring expected credit loss means that the Company assesses on each balance sheet
date whether the credit risk of financial assets has increased significantly since the initial recognition. If yes, the
Company measures loss reserves at an amount equivalent to the expected credit loss in the entire duration; if not,
the Company measures loss reserves at an amount equivalent to the expected credit loss in the next 12 months.
The Company considers all reasonable and evidence-based information, including forward-looking information,
when assessing expected credit loss;
As for financial instruments with low credit risk on the balance sheet date, the Company measures the loss
reserves according to the expected credit loss in the future 12 months, assuming that its credit risk has had no
significant increase since its initial recognition. The Company chooses to measure loss reserves according to the
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expected credit loss in the next 12 months or in the entire duration based on whether the credit risk has increased
significantly since initial recognition.
2) Standards for judging whether credit risk has increased significantly since initial recognition
If the probability of default (PD) of a financial asset in the expected duration recognized on the balance sheet date
is significantly higher than that in the expected duration recognized at the time of initial recognition, the credit
risk of the financial asset has increased significantly. Except for special circumstances, the Company determines
whether credit risk has increased significantly since initial recognition by reasonably assessing the changes in the
PD in the entire duration with the changes in the coming 12 months.
3) Portfolio method for assessing expected credit risk based on portfolios
The Company assesses individual credit risk of financial assets with significantly different credit risks. Examples
include the following: receivables from related parties; receivables that have disputes with counterparties or those
involved in litigation or arbitration; there are obvious signs that the debtor is very unlikely to fulfill the repayment
obligation.
In addition to financial assets whose individual credit risk is assessed, the Company divides financial assets into
different groups based on common risk characteristics, and assesses credit risk on a portfolio basis.
4) Accounting treatment methods for impairment of financial assets
At the end of the reporting period, the Company calculates the expected credit loss of financial assets. If the
expected credit loss is greater than the book value of its current impairment provisions, the difference is
recognized as an impairment loss; if it is less than the current book value of the impairment provisions, the
difference is recognized as impairment gains.
5) Methods for recognizing credit losses of financial assets
a. Notes receivable
The Company measures loss reserves for notes receivable at an amount equivalent to expected credit loss in the
entire duration. The Company divides notes receivable into different portfolios based on their credit risk
characteristics:
Item Basis for determining the portfolio
Banker’s acceptance Acceptors are banks with low credit risks.
Trade acceptance The aging of trade acceptance is used as credit risk characteristics.
b. Accounts receivable
The Company measures loss reserves for accounts receivable without major financing component at an amount
equivalent to expected credit loss in the entire duration.
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The Company measures loss reserves for accounts receivable and lease receivables with major financing
component at an amount equivalent to expected credit loss in the duration.
Except for accounts receivable whose individual credit risk is assessed, the Company divides accounts receivable
into different portfolios based on their credit risk characteristics:
Item Basis for determining the portfolio
Aging portfolio This portfolio uses aging of accounts receivable as credit risk characteristics.
Related party portfolio This portfolio comprises amounts of related parties within the consolidated scope.
c. Other receivables
The Company adopts the amount equivalent to the expected credit loss in the coming 12 months or in the entire
duration to measure impairment losses based on whether the credit risk of other receivables has increased
significantly since initial recognition. Except for other receivables whose individual credit risk is assessed, the
Company divides other receivables into different portfolios based on their credit risk characteristics:
Item Basis for determining the portfolio
Aging portfolio This portfolio uses aging of other receivables as credit risk characteristics.
Related party portfolio This portfolio comprises amounts of related parties within the consolidated scope.
11. Notes receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting
Estimates of Section X.
12. Accounts receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting
Estimates of Section X.
13. Accounts receivable financing: None
14. Other receivables
Recognition methods and accounting treatment methods for expected credit loss in other receivables
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting
Estimates of Section X.
15. Inventories
(1) Classification of inventories
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Inventories mainly include raw materials, goods in process, materials for consigned processing, commodity stocks,
packages, and low-value consumables.
(2) Pricing methods for inventory acquisition and delivery
Inventories are priced at actual cost when they are acquired. Inventory costs include procurement costs,
processing cost, and other costs. Inventories are priced by the weighted average method during receipt and
delivery.
(3) Methods for recognition of the net realizable value of inventories and the provisions for impairment of
inventories
The net realizable value refers to the amount of the estimated selling price of the inventory minus the estimated
cost, estimated selling expenses, and related taxes and fees at the time of completion in daily activities. When
recognizing the net realizable value of inventories based on the substantial evidence obtained, the Company also
considers the purpose of holding the inventories and the impact on matters after the balance sheet date.
On the balance sheet date, inventories are measured at the lower of costs and the net realizable value. When the
net realizable value is lower than costs, the Company sets aside provisions for inventory impairment. Provisions
for inventory impairment are set aside based on the difference between the cost of individual inventory item and
its net realizable value.
After provisions for the inventory impairment are set aside, if the influencing factors in previous write-down of
the inventory value disappear, causing the net realizable value of the inventory to be higher than its book value, it
shall be reversed within the amount of the provisions for inventory impairment that have been set aside and
recognized as the profit and loss of the current period.
(4) The perpetual inventory system is adopted for the inventories.
(5) Amortization method for low-value consumables and packages
The one-time amortization method is adopted for low-value consumables and packages upon receipt.
16. Contract assets: None
17. Contract costs: None
18. Assets held for sale
The Company classifies non-current assets or a disposal group as held for sale (including exchange of non-
monetary assets with commercial substance, the same below) if their book values are recovered principally
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through disposal rather than through continuing use. Specifically, the following conditions shall be met
simultaneously: A certain non-current asset or disposal group can be sold immediately under the current
conditions according to the practice of selling such assets or disposal groups in similar transactions; the Company
has made a resolution of an offer and obtained the purchase commitment; the sale is expected to be completed
within one year. Among them, the disposal group refers to a group of assets that are disposed of as a whole
through sale or other means in a transaction, and the liabilities directly related to these assets that are transferred in
the transaction. If the asset group or the combination of asset groups to which the goodwill (obtained from
business combination) has been allocated in accordance with the Accounting Standards for Business Enterprises
No. 8 -- Impairment of Assets, the disposal group shall include the goodwill allocated to it.
During initial measurement or re-measurement of the non-current assets and disposal groups classified into held-
for-sale assets on the balance sheet date, if the book value of such assets is higher than the net value deducting the
cost of offer, the book value is written down to the recoverable amount by the Company, the written-down amount
is recognized as profit and loss of the current period and impairment provisions are set aside at the same time. For
the disposal group, the recognized asset impairment loss is first deducted from the book value of the goodwill in
the disposal group, and then deducted in proportion from the book value of non-current assets specified in the
applicable Accounting Standards for Business Enterprises No. 42 - Non-Current Assets and Disposal Groups Held
for Sale and Discontinued Operations (hereinafter referred to as the “Standards for Assets Held for Sale”). If the
fair value of the disposal group held for sale on the subsequent balance sheet date increases after deducting the
selling expenses, the previously written down amount shall be restored, and reversed within the amount of the
asset impairment losses recognized for non-current assets as per the Standards for Assets Held for Sale applicable
after the assets are classified into those held for sale, and the reversed amount shall be recognized as the profit and
loss of the current period. Besides, the book value of the reversed amount shall be increased in proportion
according to the proportion of the book value of the non-current assets specified in the Standards for Assets Held
for Sale applicable to those except for the goodwill in the disposal group. The book value of the goodwill that has
been deducted, and the asset impairment losses recognized before the non-current assets are classified into assets
held for sale as per the Standards for Assets Held for Sale shall not be reversed.
Non-current assets held for sale and non-current assets in the disposal group are not subject to depreciation or
amortization. Interest and other expenses on liabilities in the disposal group held for sale continue to be
recognized.
When the non-current assets or disposal group no longer meets the conditions for classification into the assets held
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for sale, the Company no longer classifies them into the category or removes the non-current assets from the
disposal group held for sale, and measures them at the lower of the following two: (1) in terms of the book value
before classification into assets held for sale, for which the measurement standard is the amount after adjustment
according to the depreciation, amortization, or impairment that should have been recognized under the assumption
that they are not classified into assets held for sale; and (2) the recoverable amount.
19. Investments in creditor’s rights: None
20. Other investments in creditor’s rights: None
21. Long-term receivables: None
22. Long-term equity investments
The long-term equity investments herein refer to the long-term equity investments in which the Company has
control, joint control, or significant influence on the investee. Long-term equity investments where the Company
has no control, joint control, or significant influence on the investee are accounted as financial assets measured at
fair value through profit and loss of the current period. Among them, for those that are non-tradable, the Company
may choose to designate them as the financial assets measured at fair value through other comprehensive income
for accounting during initial recognition. See “Note V (10)” for their detailed accounting policies.
Joint control refers to the common control over a particular arrangement according to relevant agreement, and that
the decisions on relevant activities under such arrangement are subject to the unanimous consent from the parties
sharing the joint control. Significant influence means having the power to participate in the financial and
operating policy decision-making of the investee, but cannot control or, together with other parties, jointly control
the formulation of these policies.
(1) Determination of investment cost
For long-term equity investments obtained from combination of enterprises under common control, the share of
the combined party’s owner’s equity in the book value of the consolidated financial statements of the final
controlling party which is acquired on the combination date shall be regarded as the initial investment cost for
long-term equity investments. The capital reserves shall be adjusted if there is difference between the initial
investment cost of long-term equity investment and the cash paid, the transferred non-cash assets, and the book
value of the debts assumed; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted. If
the equity securities issued are used as the combination consideration, the share of the combined party’s owner’s
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equity in the book value of the consolidated financial statements of the final controlling party which is acquired on
the combination date shall be regarded as the initial investment cost for long-term equity investments; the total
book value of the shares issued shall be the share capital; the capital reserves shall be adjusted if there is
difference between the initial investment cost of long-term equity investments and the total book value of the
shares issued; if the capital reserves are insufficient to balance the difference, retained earnings shall be adjusted.
For long-term equity investments obtained from combination of enterprises under different control, the
combination costs on the acquisition date shall be used as the initial investment costs of the long-term equity
investment; the combination costs include the sum of the assets paid by the acquirer, the liabilities incurred or
assumed, and the fair value of the equity securities issued.
Intermediary expenses such as auditing, legal services, assessment and consulting and other related management
expenses incurred by the combining party or acquirer for the business combination shall be recognized as the
profit and loss of the current period.
Other equity investments except for long-term equity investments formed via business combination are initially
measured at cost. Subject to the way the long-term equity investments are obtained, the costs shall be recognized
based on the cash actually paid by the Company for acquisition, the fair value of the equity securities issued by
the Company, the value agreed in the investment contract or agreement, the fair value or original book value of the
assets swapped out in a non-monetary asset exchange transaction, and the fair value of the long-term equity
investment itself. Expenses, taxes, and other necessary expenditures directly related to acquisition of long-term
equity investments are also recognized as investment costs.
(2) Subsequent measurement and recognition of profit and loss
If the Company has common control or significant influence over the investee (except for constituting co-
proprietors), the long-term equity investment shall be accounted for by using the equity method. Additionally, the
Company’s financial statements apply the cost method for long-term equity investments that can make control in
the investee
1) Long-term equity investments accounted for using the cost method
When the cost method is used, the long-term equity investments are calculated according to the initial investment
cost. In the event that the investment is added or recovered, the cost of the long-term equity investments shall be
adjusted. With the exception of the price actually paid at the acquisition of investment or cash dividends or profits
included in consideration, declared but not issued yet, the return on investment of the current period shall be
recognized according to the cash dividends or profits declared to be issued by the investee.
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2) Long-term equity investments accounted for using the equity method
When using equity method, if the initial investment cost of long-term equity investments is greater than the fair
value share of the identifiable net assets entitled of the investee at the time of investment, the initial investment of
the long-term equity investments shall not be adjusted. If the initial investment cost of long-term equity
investments is lower than the fair value share of the identifiable net assets entitled of the investee at the time of
investment, the difference shall be recognized as profit and loss of the current period and the cost of the long-term
equity investments shall be adjusted at the same time.
When the equity method is used, return on investment and other comprehensive income shall be respectively
determined based on the share of net profit or loss and other comprehensive income realized by the investee that
shall be attributable or assumed, and the book value of long-term equity investments shall be adjusted at the same
time. Attributable share shall be calculated based on the profit or cash dividends declared by the investee and the
book value of long-term equity investments shall be accordingly decreased. In respect to other changes of owner’s
equity of the investee in addition to net profit or loss, other comprehensive income and profit distribution, the
book value of long-term equity investments shall be adjusted and recognized as capital surplus. When confirming
the share of the investee’s net profit and loss, the Company shall confirm the investee’s net profit after adjustment
based on the fair value of the identifiable net assets of the investee at the acquisition of the investment. Where the
accounting policy and accounting period adopted by the investee differs from those of the Company, the investee’s
financial statements shall be adjusted according to the Company’s accounting policy and accounting period, and
the return on investment and other comprehensive income shall be recognized accordingly. Where the transactions
are between the Company and the associates and joint ventures, and the assets that are invested or sold do not
constitute business, unrealized internal transaction profits and losses incurred between the Company and the
associates and joint ventures shall be offset with the part attributable to the Company which is calculated on a due
pro-rata basis, and the return on investment shall be recognized on this basis. However, unrealized internal
transaction losses incurred between the Company and the investees shall not be offset if they fall under the
impairment losses on assets transferred.
When confirming the limit of net loss incurred by the investee, the limit is the extent that the book value of the
long-term equity investments and other long-term equity that substantially constitutes a net investment in the
investment target is written down to zero. Additionally, if the Company has obligations to assume additional
losses of the investee, provisions are recognized according to the expected obligation, and recognized as
investment losses for the period. Where the investee records net profit in the future, the Company resumes and
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recognizes the profit-sharing amount after such amount makes up the unrecognized loss-sharing amount.
23. Investment property
Measurement model for investment property
Measurement by the cost method
Depreciation or amortization method
Investment properties are real estate held to generate rental income or earn capital gains or both. Investment
properties include land use rights leased out, land use rights held for transfer after appreciation, buildings leased
out, etc.
Investment property is initially measured at cost. Subsequent costs are included in the investment property’s cost
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. Other subsequent costs are recognized as profit and loss of the current
period when incurred.
The Company adopts the cost model for subsequent measurement of investment property, and depreciates or
amortizes it according to policies consistent with those for buildings or land use rights.
Impairment test method and impairment provision method for investment property are detailed in “Note V (31)”.
Investment properties are derecognized when they are disposed of or permanently withdrawn from use and it is
expected that no economic benefit can be generated from its disposal. The income from selling, transferring,
writing off or destroying investment property, less its book value and relevant taxes and fees, is recognized as
profit and loss of the current period.
24. Fixed assets
(1) Recognition conditions
Fixed assets are tangible assets with a useful life of more than one accounting year that are held for production or
supply of goods or labor services, for rental to third parties, or for use in the organizations. Fixed assets shall only
be recognized when relevant economic interest may flow into the Company and costs thereof can be reliably
measured. Fixed assets shall be initially measured at cost and by taking into account the impact of estimated
disposal expense.
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(2) Depreciation method
Type Depreciation method Depreciation life Residual value rate Annual depreciation rate
Properties and buildings Straight-line depreciation 10 to 30 years 5%. 10% 3.00%, 3.17% to 9.00%,
9.50%
Equipment Straight-line depreciation 2 to 20 years 5%. 10% 4.50%, 4.75% to 45.00%,
47.50%
Motor vehicles Straight-line depreciation 5 to 14 years 5%. 10% 6.43%, 6.79% to 18.00%,
19.00%
Office equipment Straight-line depreciation 3 to 8 years 5%. 10% 11.25%, 11.88% to
30.00%, 31.67%
Production equipment Straight-line depreciation 2 to 5 years 5%. 10% 18.00%, 19.00% to
45.00%, 47.50%
Estimated residual value refers to the current amount where, supposed the service life of a fixed asset has expired
and it is in the expected status of such expiration, the Company obtains from the disposal of such asset after the
estimated disposal expense is deducted.
(3) Determination basis, pricing method and depreciation method of fixed assets acquired under finance
leases
Leases of assets where substantially all the risks and rewards of ownership have been transferred are classified as
finance leases. Title may or may not eventually be transferred. The fixed asset leased in through finance leases
adopts the same depreciation policy self-owned fixed assets. If it can be reasonably ascertained that the ownership
of the asset leased can be obtained by the expiration of the tenancy, the asset is depreciated over its service life; if
not, the asset is depreciated over the shorter of the tenancy and the service life of the leased asset.
25. Construction work in process
Construction work in progress is measured at actual project expenditure, comprising project expenditure incurred
during construction and other necessary cost incurred.
The Company’s Construction work in progress is transferred to fixed assets when the assets are ready for their
intended use. If the fixed assets under construction have reached the expected usable status but have not yet
completed the final account for completed project, they shall be recognized as fixed assets according to the
estimated value, and accrue depreciation. After the completion of the final account for completed project, the
original estimated value is adjusted according to the actual cost, but the original accrued depreciation amount is
not adjusted.
Impairment test method and impairment provision method for Construction work in progress are detailed in “Note
V (31)”.
26. Borrowing costs
Borrowing costs include interest on borrowings, amortizations of discounts or premiums, incidental expenses,
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exchange difference resulting from foreign-currency borrowings, etc. The borrowing costs that can be directly
attributable to the acquisition, construction or production of an asset eligible for capitalization shall be capitalized
if the capital expenditures have been incurred, the borrowing costs have been incurred, or the necessary purchase,
construction or production activities to make the asset reach the expected available or marketable state have begun.
When the assets with the purchase, construction or production meeting the capitalization conditions reach the
expected available or marketable state, they cease to be capitalized. Any other borrowing costs are recognized as
an expense in the period when they are incurred.
The amount of interest that shall be capitalized is determined based on the interest expenses incurred in the period
when a specifically borrowed fund is obtained less any income earned on the unused borrowing fund as a deposit
in a bank or as a temporary investment. Where funds are borrowed for a general purpose, the amount of interest
that shall be capitalized is determined by multiplying the part of the accumulative asset disbursements in excess of
the weighted average asset disbursement for the specifically borrowed fund by the capitalization rate of the
general borrowing used. The capitalization rate is the weighted average interest rates applicable to the general-
purpose borrowings.
During the capitalization, all exchange differences arising from earmarked foreign-currency borrowings shall be
capitalized; exchange differences arising from general-purpose foreign-currency borrowings shall be recognized
as profit and loss of the current period.
Assets eligible for capitalization refer to assets such as fixed assets, investment real estates and inventories that
can reach the expected available or marketable status after a long period of purchase, construction or production
activities.
If the acquisition, construction or production of an asset eligible for capitalization is continuously suspended for
over three months for abnormal reasons, capitalization of the borrowing costs shall be suspended, until the
acquisition, construction or production of the asset is resumed.
27. Biological assets: None
28. Oil & gas assets: None
29. Right-of-use assets
(1) Recognition methods
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer
distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
assets and lease liabilities need to be recognized.
Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during the term of lease.
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(2) Accounting treatment methods
The right-of-use asset is measured at cost at the commencement date. The cost of right-of-use asset comprises: the
amount equal to the lease liability at its initial recognition; lease payments made at or before the commencement
of the lease, less any lease incentives received; any initial direct costs incurred by the lessee; an estimate of costs
to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is
located or restoring the underlying asset to the condition required by the terms and conditions of the lease. The
Company as the lessee recognizes and measures the aforementioned dismantling, restoration and other costs in
accordance with Accounting Standard for Business Enterprises No. 13 - Contingencies. Subsequent adjustments
are made for any remeasurement of lease liabilities.
The straight-line method is used to accrue depreciation. For right-of-use assets, if it is reasonably ascertained that
the ownership of the asset will be transferred to the lessee at the end of the lease term, then depreciation period
runs to the end of the useful life of the lease asset. If it cannot be reasonably ascertain that the ownership of the
asset leased will be transferred to the lessee at the end of the lease term, then depreciation period runs to the
earlier of the end of the useful life of the asset or the end of the lease term.
Impairment test method and impairment provision method for right-of-use assets are detailed in “Note V (31)”.
For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assets
but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line
method or other systematically reasonable methods during each period of the lease.
30. Intangible assets
(1) Pricing method, service life, and impairment test
Intangible assets refer to identifiable non-monetary assets without physical substance owned or controlled by the
Company.
Intangible assets are initially measured at cost. Costs of intangible assets are included in intangible assets’ book
value, only when it is probable that future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. Other costs of intangible assets are recognized as profit and loss
of the current period when incurred.
Land use rights acquired are generally accounted for as intangible assets. With respect to self-built buildings
including plants, the relevant land use right expenses and buildings’ construction costs are accounted for as
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intangible assets and fixed assets, respectively. For purchased houses and buildings, the price paid is distributed
between the land use right and the building. If it is difficult to distribute, it shall all be included in fixed assets.
From the beginning of use of intangible assets with finite service life, the accumulated amount of the original
value less estimated net residual value and the provisions for asset impairment set aside shall be amortized evenly
in stages by straight-line method over their service life. Intangible assets with uncertain service lives are not
amortized.
The Company reviews the service life and amortization method of intangible asset with finite service life at the
end of the reporting period, and a change therein (if any) shall be accounted for as a change in accounting
estimates. Additionally, the Company reviews the service life and amortization method of intangible asset with
uncertain service life. If there is evidence that the period when it brings economic benefits to the enterprise is
foreseeable, its service life shall be estimated and it is amortized according to the amortization policy for
intangible assets with finite service life.
Impairment test method and impairment provision method for intangible assets are detailed in “Note V (31)”.
(2) Accounting policy for expenditure on internal research and development
The Company classifies the expenditure on an internal research and development project into expenditure on the
research phase and expenditure on the development phase.
Expenditure on the research phase is recognized as profit and loss of the current period when incurred.
Expenditure on the development phase is recognized as intangible asset when all the following criteria are met,
while expenditure in the development phase that does not meet the following criteria is recognized as profit and
loss of the current period when incurred:
1) technically feasible to complete the intangible asset so that it will be available for use or sale;
2) the intention to complete the intangible asset and use or sell it;
3) how the intangible asset will generate probable future economic benefits. Among other things, the Company
can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it
is to be used internally, the usefulness of the intangible asset;
4) the availability of adequate technical, financial and other resources to complete the development and the ability
to use or sell the intangible asset;
5) the ability to measure reliably the expenditure attributable to the intangible asset during the development.
Where the expenditure on research and development incurred cannot be classified into the expenditure on research
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phase or the expenditure on development phase, it shall be recognized as profit and loss of the current period
when incurred.
31. Long-term asset impairment
The Company determines on the balance sheet date whether there is any indication that the non-current and non-
financial assets may have been impaired, including fixed assets, construction work in progress, intangible assets
with limited service life, and investment properties measured using the cost model, and long-term equity
investments in subsidiaries, joint ventures and associates. If there is any indication that the asset is likely to be
impaired, the Company will estimate the recoverable amount and carry out the impairment test. Impairment tests
shall be conducted each year for goodwill and intangible assets with uncertain service life and not yet in use,
whether or not there is any indication of impairment.
If an impairment test shows that the recoverable amount of an asset is lower than its book value, the difference is
recognized as a provision for impairment and recognized as the impairment loss. The recoverable amount is
determined based on the higher of the net amount of the fair value of the asset minus the disposal expenses and
the present value of the expected future cash flow of the asset. The fair value of asset is determined according to
the price of the sales agreement in fair trade. If there is no sales agreement but an active market for the asset, the
fair value is determined according to the price offered by the buyer for the asset. If there is neither sales agreement
nor active market for the asset, the fair value of the asset shall be estimated based on the best information
available. The disposal costs include legal fees, relevant taxes and fees, as well as handling fees related to the
disposal of asset, and the direct costs incurred to ensure the asset reaches the marketable state. The present value
of the expected future cash flow of an asset shall be determined by the discounted cash at an appropriate discount
rate, on the basis of the expected future cash flow generated during the continuous use or final disposal of an asset.
Provisions for asset impairment are calculated and recognized on an individual basis. If it is difficult to estimate
the recoverable amount of individual assets, the Company will determine the recoverable amount of the asset
group on the basis of the asset group to which the asset belongs. Asset group refers to the smallest asset portfolio
which can independently generate cash inflows.
When an impairment test is performed on the goodwill separately listed in the financial statement, book value of
such goodwill is apportioned to the asset group or combination of asset groups that can benefit from the synergy
effect of business combination. If the test result shows that the recoverable amount of the asset group or
combination of asset groups is lower than their book value, corresponding impairment losses on goodwill will be
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recognized. The impairment loss shall first offset against the book value of goodwill that is apportioned to asset
group or a combination of asset groups, and then offset against the book value of assets excluding goodwill in the
asset group or the combination of asset groups on a pro-rata basis according to the proportion of their book value.
Once the aforementioned asset impairment loss is recognized, it will not be reversed in subsequent accounting
periods even if the value can be recovered.
32. Long-term unamortized expenses
Long-term unamortized expenses are expenses which have been incurred but shall be amortized over a period
longer than one year, including the reporting period and the future periods. Long-term unamortized expenses shall
be amortized based on the straight-line method over the expected benefit period.
33. Contract liabilities
A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has
received consideration from the customer.
Contract assets and liabilities within a single contract should be presented on a net basis. If the net amount is debit
balance, it shall be presented in the item of “contract assets” or “other non-current assets” based on its liquidity. If
the net amount is credit balance, it shall be presented in the item of “contract liabilities” or “other non-current
liabilities” based on its liquidity.
34. Employee remuneration
(1) Accounting treatment method for short-term remuneration
Short-term remuneration includes salaries, bonuses, allowances and subsidies, employee welfare, medical
insurance fees, maternity insurance fees, employment injury insurance fees, housing provident funds, labor union
fees, staff education funds, and non-monetary welfare. The Company shall, within the accounting period when its
employees provide service, recognize actual short-term remuneration as liabilities which shall be recognized as
profit and loss of the current period or relevant asset costs. Wherein, non-monetary benefits are measured at fair
value.
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(2) Accounting treatment method for post-employment benefits
Post-employment benefit includes basic endowment insurance, unemployment insurance, etc. It also includes
defined contribution plans. Where defined contribution plans are adopted, the corresponding amount payable shall
be recognized as profit and loss of the current period or relevant asset costs in which it is incurred.
(3) Accounting treatment method for dismissal benefits
If the Company terminates the labor relationship with an employee before the employee’s labor contract expires,
or proposes to give the employee compensation for encouraging the employee to voluntarily accept dismissal, the
liabilities arising from the compensation giving to the employee for the termination of the labor relationship with
the employee shall be recognized as profit and loss of the current period, when the Company cannot unilaterally
withdraw the termination of the labor relationship plan or the dismissal proposal, or when it recognizes the costs
related to the restructuring of the payment of the dismissal benefits, whichever is earlier. However, if it is expected
that the dismissal benefits cannot be paid in full within twelve months after the end of the annual reporting period,
they shall be accounted for according to other long-term employee remunerations.
Internal retirement schemes for employees shall be accounted for following the same principles of the above
dismissal benefits. Where the salaries and social insurance fees of early retirees to be paid by the Company from
the date when employees stop providing services to the normal retirement date meet the recognition conditions for
projected liabilities, they shall be recognized as profit and loss of the current period.
(4) Accounting treatment method for other long-term employee benefits
Other long-term benefits provided by the Company to employees that meet the conditions of the defined
contribution plan are accounted for in accordance with the defined contribution plan; other long-term benefits are
accounted for in accordance with the defined benefit plan.
35. Lease liabilities
(1) Recognition methods
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer
distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
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assets and lease liabilities need to be recognized.
(2) Accounting treatment methods
1) The lessee shall calculate the interest expenses of the lease liability in each period of the lease term and include
them in the profit and loss of the current period.
2) For short-term leases and low-value asset leases, the lessee may choose not to recognize as right-of-use assets
but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line
method or other systematically reasonable methods during each period of the lease term;
Pursuant to requirements of the new lease standards, the Company recognizes lease liabilities for all leased assets
based on the present value of the minimum lease payment of future rent payable (except for short-term leases and
low-value asset leases that have been handled with the simplified method), and confirm depreciation and
unrecognized financing expenses separately from January 1, 2021. Information of the comparable period is not
adjusted.
36. Provision
An obligation related to contingent issues and meeting the following conditions shall be deemed a provision: (1)
such an obligation is a current one assumed by the Company; (2) fulfilling such an obligation might cause
economic benefits to flow out of the Company; and (3) the amount of such an obligation is measurable reliably.
On the balance sheet date, a provision is measured at the best estimate of the expenditure required to settle the
related present obligation, with comprehensive consideration of factors such as the risks, uncertainty and time
value of money relating to a contingency.
A provision is separately recognized as an asset and the recognized compensation amount shall not exceed the
book value of the provision, when all or part of the expenses required to pay off the provision are expected to be
compensated by a third party and the amount of compensation is basically determined to be receivable.
37. Share-based payment
Share-based payment is the transaction made through granting equity instruments or bearing the liabilities
recognized based on such instruments in exchange for services rendered by employees or other parties. The
Company’s share-based payment includes equity-settled share-based payment and cash-settled share-based
payment.
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(1) Equity-settled share-based payment
Where the share payment is settled through equity for acquisition of service from employees, it shall be measured
at the fair value of the equity instruments granted to the employees. If the right cannot be exercised until the
vesting period ends or until the prescribed performance conditions are met, the amount of such fair value shall,
based on the best estimate of the number of vested equity instruments, be recognized as the relevant costs or
expenses by straight-line method; if the right can be exercised immediately following the grant, the amount of
such fair value shall be recognized as the relevant costs or expenses on the grant date, and the capital reserve shall
be increased accordingly.
On each balance sheet date within the vesting period, the Company carries out the best estimation based on such
follow-up information such as the variation of the number of vested staff acquired recently, and revises the
number of estimated vested equity instruments. The impact of the above estimates shall be recognized as the
relevant costs or expenses of the current period, and the capital reserve shall be adjusted accordingly.
For an equity-settled share-based payment in return for the service of any other party, if the fair value of the
service of any other party can be reliably measured, it shall be measured at the fair value of the service of any
other party on the acquisition date; if the fair value of the service of any other party cannot be reliably measured,
but the fair value of the equity instruments can be reliably measured, it shall be measured at the fair value of the
equity instruments on the acquisition date and included in the relevant costs or expenses, and the shareholders’
equity shall be increased correspondingly.
(2) Cash-settled share payment
The cash-settled share-based payment shall be measured at the fair value of the Company’s liabilities determined
based on shares or other equity instruments. If the right may be exercised immediately after the grant, relevant
costs or expenses shall be recognized the grant date, and the liabilities shall be increased accordingly. If the right
may not be exercised until the vesting period ends or until the specified performance conditions are met, on each
balance sheet date within the vesting period, the services obtained in the current period shall, based on the best
estimate of the information about the exercisable right, be recognized as the relevant costs or expenses at the fair
value of the liability undertaken by the Company, and liabilities shall be increased accordingly.
The fair value of liabilities is re-measured and any change thereto is recognized as profit and loss of the current
period on each balance sheet date and settlement date prior to settlement of the relevant liabilities.
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38. Preference shares, perpetual bonds and other financial instruments: None
39. Revenue
Accounting policy for recognition and measurement of revenue
The revenue is recognized when the customers take control of the relevant goods or services if the contract
between the Company and the customers meet all the following conditions: 1) the parties to the contract have
approved such contract and undertake to perform their respective obligations; 2) the contract has specified the
rights and obligations of the parties thereto and in connection with the transfer of goods or provision of labor
services; 3) the contract sets out clear payment terms related to the transfer of goods; 4) the contract has
commercial substance, meaning that the performance thereof will change the risk, time distribution or amount of
the Company’s future cash flow; 5) the Company is very likely to recover the consideration obtained by
transferring goods to customers.
On the enforcing date of the contract, the Company identifies all individual performance obligations in the
contract, and apportions the transaction price to each individual performance obligation according to the relative
proportion of the individual selling price of the goods. When determining the transaction price, the Company has
considered the impact of such factors including variable consideration, major financing component of the contract,
non-cash consideration, and consideration payable to the customer.
With respect to each individual performance obligation of the contract, the Company will recognize the
transaction price apportioned to such obligation as revenue based on the progress of performance during the
relevant performance periods, if any of the following conditions is met: 1) the customer obtains and consumes the
economic benefits brought by the Company’s performance during such performance; 2) the customer can control
the goods in progress during the Company’s performance; 3) the goods produced from the Company’s
performance has irreplaceable use, and in respect of the portion of revenue arising from the Company’s
performance completed to date, the Company is entitled to collect revenue during the entire validity period of the
contract. The progress of performance is determined according to the nature of the transferred goods using the
input or output method. When such progress cannot be reasonably determined, if the costs incurred are expected
to be compensated, the Company recognizes revenue based on the amount of costs incurred, until the progress of
performance can be reasonably determined.
If none of the aforesaid conditions is met, the Company will recognize the transaction price apportioned to such
individual performance obligation when the customer obtains the control over relevant goods. To decide whether
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the customer has obtained the control over goods, the Company takes into account the following indications: 1)
the enterprise has the present right to collection for the goods, meaning the customer bears the present obligation
to payment for the goods; 2) the enterprise has passed the legal title to the goods to the customer, meaning the
customer has had the legal title to the goods; 3) the enterprise has transferred the physical possession of the goods
to the customer, meaning the customer has had the physical possession of the goods; 4) the enterprise has
transferred the major risks and remunerations concerning the title to the goods to the customer, meaning the
customer has obtained the major risks and remunerations concerning the title to the goods; 5) the customer has
accepted the goods; 6) other indications to show that the customer has obtained the control over the goods.
Generally, the Company’s business of goods selling only comprises the performance obligation of transferring the
goods. The control of the goods is transferred when they are sent out and the Company receives the signed receipt
and other documents from the customer, so the Company confirms the realization of revenue at that point in time.
The discounts, rewards and other arrangements in some contracts between the Company and customers constitute
variable consideration. The Company uses the expected value method or the most likely amount to determine the
best estimates for variable consideration, but the transaction price containing variable consideration shall not
exceed the amount of cumulatively recognized revenue that is unlikely to have major reversals when the relevant
uncertainties are eliminated.
Situations where different business models are adopted for different businesses, which may lead to the differences
in the accounting policy for recognition of revenue: None
40. Government grants
Government grants are monetary or non-monetary assets acquired by the Company from the government free of
charge, excluding the capital invested by the government as an investor and granted corresponding owner’s equity.
Government grants are classified into government grants related to assets and government grants related to
income. The Company defines the government grants for purchasing or constructing or otherwise forming long-
term assets as asset-related government grants; other government grants are defined as the income-related
government grants. Government grants shall be measured at the amount received or receivable if they are
monetary assets. Non-monetary government grants shall be measured at fair value; if the fair value cannot be
reliably obtained, they shall be measured at the nominal amount. The government grants measured at the nominal
amount shall be directly recognized as the profit and loss of the current period.
Asset-related government grants are recognized as deferred income, and included in the profit and loss of the
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current period in stages according to a reasonable and systematic method over the service life of the relevant
assets. The income-related government grants shall be recognized as deferred income if they are used to
compensate relevant expenses or losses in subsequent periods, and shall be recognized as profit and loss of the
current period during the recognition of related expenses; the grants used to compensate related expenses or losses
already incurred shall be directly recognized as profit and loss of the current period.
The government grants related to both assets and income shall be accounted for by distinguishing different parts;
if it is difficult to distinguish, they shall be, as a whole, classified as income-related government grants.
Government grants related to the Company’s daily activities shall be recognized as other profit and loss or write
down relevant costs according to the essence of economic business; those unrelated to the Company’s daily
activities shall be recognized as non-operating income and expenditure.
If the recognized government grants need to be returned and there is relevant deferred income balance, the book
balance of relevant deferred income shall be written off, and the excess shall be recognized as profit and loss of
the current period; otherwise, government grants shall be directly recognized as profit and loss of the current
period.
41. Deferred income tax assets/deferred income tax liabilities
(1) Current income tax
On the balance sheet date, the Company measures a current tax liability (or asset) arising from the current and
prior periods based on the amount of income tax expected to be paid by the Company (or returned by tax authority)
calculated by related tax laws. The taxable income which is the basis for calculation of the current income tax is
calculated after appropriate adjustments to the pretax accounting profits for the reporting period.
(2) Deferred income tax assets and deferred income tax liabilities
For the difference between the book value of certain assets and liabilities and their tax bases, and the temporary
differences between the book values and the tax bases of items, of which the tax bases can be determined for tax
purposes according to the tax laws but which have not been recognized as assets and liabilities, the Company
recognizes deferred income tax assets and deferred income tax liabilities using the balance sheet debt method.
Where the taxable temporary differences arise from the initial recognition of goodwill and the initial recognition
of an asset or liability arising from the transaction that is not a business combination, nor, at the time of the
C&S Paper Co., Ltd. Semi-annual Report 2021
137
transaction, affects neither accounting profit and taxable profit (or deductible loss), the relevant deferred income
tax liability shall not be recognized. Additionally, in respect of taxable temporary difference associated with
investments in subsidiaries, joint ventures and associates, where the Company can control the timing of the
reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the
foreseeable future, the relevant deferred income tax liability shall not be recognized. Other than the above
exceptions, the Company shall recognize deferred income tax liabilities arising out from all other taxable
temporary differences.
Where the deductible temporary differences arise from the initial recognition of an asset or liability arising from
the transaction that is not a business combination, nor, at the time of the transaction, affects neither accounting
profit and taxable profit (or deductible loss), the relevant deferred income tax liability shall not be recognized.
Additionally, in respect of deductible temporary difference associated with investments in subsidiaries, joint
ventures and associates, where it is probable that the temporary differences will not be reversed in the foreseeable
future or taxable profit will not be available against which the deductible temporary differences can be utilized in
the future, the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, the
Company recognizes a deferred tax asset for other deductible temporary differences, to the extent that it is
probable that future taxable profit will be available against which the deductible temporary differences can be
utilized.
The tax effects of deductible losses and taxes available for carrying over are recognized as an asset when it is
probable that future taxable profits would be available against which these losses can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or the liability is settled, according to the requirements of tax laws.
The book value of deferred tax assets is reviewed at the balance sheet date and written down to the extent that it is
no longer probable that sufficient taxable profit will be available in future periods to allow the deferred tax assets
to be utilized. Such write-down is reversed when it becomes probable that sufficient taxable profits will be
available.
(3) Income tax expenses
Income taxes comprise current income tax and deferred income tax.
The current income tax and deferred income tax expense or income is recognized as the profit and loss of the
C&S Paper Co., Ltd. Semi-annual Report 2021
138
current period except that the current income tax and deferred income tax is related to transactions or events,
which are recognized as other comprehensive income or directly recognized as shareholders’ equity, and thus
recognized as other comprehensive income or shareholders’ equity, and that the book value of goodwill is adjusted
due to deferred income tax arising from business combination.
42. Leases
(1) Accounting treatment method for operating lease
1) Assets rented through operating lease
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer
distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
assets and lease liabilities need to be recognized.
For right-of-use assets, if it is reasonably ascertained that the ownership of the asset will be transferred to the
lessee at the end of the lease term, then depreciation period runs to the end of the useful life of the lease asset. If it
cannot be reasonably ascertained that the ownership of the leased asset will be transferred to the lessee at the end
of the lease term, then depreciation period runs to the earlier of the end of the useful life of the asset or the end of
the lease term. Meanwhile, the lessee needs to determine whether the right-of-use asset is impaired and account
for the identified impairment loss.
For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assets
but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line
method or other systematically reasonable methods during each period of the lease.
2) Assets leased out through operating lease
Lease payments collected by the Company for leasing out assets are amortized on a straight-line basis during the
entire lease term without deducting the rent-free period and recognized as lease income. The initial direct costs
paid by the Company relevant to the lease transaction shall be included in the current expenses; if the amount is
large, it shall be capitalized, and recognized as profit and loss of the current period on the same basis as the
recognized lease income over the lease term.
For lease-related expenses that should be borne by the lessee but borne by the Company instead, the Company
should deduct them from the total rental income, and the amount after deduction is allocated within the lease term.
C&S Paper Co., Ltd. Semi-annual Report 2021
139
(2) Accounting treatment method for finance lease
1) Assets rented through finance lease
The Company takes the lower of the fair value of the rented asset and the present value of the minimum lease
payments as the entry value of the rented asset, the minimum lease payments as the entry value of the long-term
payable, and the difference as unrecognized financing cost.
For details on the determination basis, pricing method and depreciation method of assets rented through finance
leases, please refer to “Note V (24)”.
The Company uses the effective interest method to amortize unrecognized financing cost during the lease term of
the asset and include them in finance expenses.
2) Assets leased out through finance lease
The Company recognizes the difference between the sum of financing lease receivable and unguaranteed residual
value and their present value as unrealized financing income on the lease start date, and recognizes as lease
income during each period when the rent is received in the future. Initial direct costs incurred to the Company
relevant to the lease transaction are included in the initial measurement of the financing lease receivable, and the
amount of revenue recognized during the lease period is reduced at the same time.
43. Other important accounting policies and accounting estimates: None
44. Significant changes of accounting policies and accounting estimates
(1) Significant changes of accounting policies
√ Applicable □ Not applicable
Contents and reasons for changes to
accounting policies Approval procedure Remarks
On December 12, 2018, the Ministry of
Finance issued the revised Accounting
Standards for Business Enterprises No. 21
-- Leases (C.K. [2018] No. 35) (hereinafter
referred to as the “New Lease Standards”),
requiring that enterprises listed both within
the borders and abroad as well as
enterprises listed abroad and adopting
IFRS or Accounting Standards for
Business Enterprises to prepare financial
statements should implement these revised
Standards from January 1, 2019; other
enterprises listed within China shall
implement these revised Standards from
On May 21, 2021, the Company convened
the 5th meeting of the fifth session of the
Board of Directors and the 3rd meeting of
the fifth session of the Board of
Supervisors, and approved the Proposal on
Changes to Accounting Policies.
Details can be found in the Announcement
on Changes to Accounting Policies
(Announcement No.: 2021-76) dated May
22, 2021 on CNINFO
(http://www.cninfo.com.cn) .
C&S Paper Co., Ltd. Semi-annual Report 2021
140
January 1, 2021.
(2) Significant changes of accounting estimates
□ Applicable √ Not applicable
(3) Description on the adjustment of relevant items in the financial statements at the beginning of the year
for the first time adoption of the new leasing standards since 2021
Applicable
Whether to adjust the subjects of the balance sheet at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Item December 31, 2020 January 01, 2021 Adjustment number
Current assets:
Monetary funds 1,125,196,199.56 1,125,196,199.56
Settlement reserve
Lending to banks and
other financial institutions
Tradable financial assets
Derivative financial
assets
Notes receivable 724,419.74 724,419.74
Accounts receivable 1,051,423,939.59 1,051,423,939.59
Accounts receivable
financing
Prepayments 26,819,108.57 26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract
reserves receivable
Other receivables 15,824,945.56 15,824,945.56
Including: Interest
receivable
Dividends
receivable
Financial assets held
under resale agreements
Inventory 1,661,274,495.32 1,661,274,495.32
Contract assets
Assets held for sale 57,073,059.69 57,073,059.69
Non-current assets due
C&S Paper Co., Ltd. Semi-annual Report 2021
141
within one year
Other current assets 101,584,569.30 101,584,569.30
Total current assets 4,039,920,737.33 4,039,920,737.33
Non-current assets:
Loans and advances to
customers
Investments in creditor’s
rights
Investments in other
creditor’s rights
Long-term receivable
Long-term equity
investment
Investment in other
equity instruments
Other non-current
financial assets
Investment property 34,575,365.94 34,575,365.94
Fixed assets 2,792,587,302.21 2,792,587,302.21
Construction work in
progress 275,904,617.95 275,904,617.95
Productive biological
assets
Oil & gas assets
Right-of-use assets 10,611,654.31 10,611,654.31
Intangible assets 169,355,772.24 169,355,772.24
Development expenses
Goodwill 64,654.15 64,654.15
Long-term deferred
expenses 26,635,983.14 26,635,983.14
Deferred income tax
assets 111,367,362.66 111,367,362.66
Other non-current assets 28,027,952.15 28,027,952.15
Total non-current assets 3,438,519,010.44 3,449,130,664.75 10,611,654.31
Total assets 7,478,439,747.77 7,489,051,402.08 10,611,654.31
Current liabilities:
Short-term borrowings 142,942,941.34 142,942,941.34
Borrowings from PBC
Placements from banks
and other financial
institutions
Tradable financial
liabilities
Derivative financial
liabilities
Notes payable 234,887,563.22 234,887,563.22
C&S Paper Co., Ltd. Semi-annual Report 2021
142
Accounts payable 761,519,389.26 761,519,389.26
Payments received in
advance
Contract liabilities 137,333,617.40 137,333,617.40
Proceeds from financial
assets sold under repo
Customer bank deposits
and due to banks and other
financial institutions
Funds from securities
trading agency
Funds from securities
underwriting agency
Employee remuneration
payable 123,524,627.11 123,524,627.11
Tax and fees payable 112,608,054.87 112,608,054.87
Other payables 754,844,580.09 754,844,580.09
Including: Interests
payable
Dividends
payable 1,437,466.77 1,437,466.77
Transaction fee and
commission receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities
due within one year 3,472,854.73 3,472,854.73
Other current liabilities 17,628,086.63 17,628,086.63
Total current liabilities 2,285,288,859.92 2,288,761,714.65 3,472,854.73
Non-current liabilities:
Insurance contract
reserves
Long-term borrowings
Bonds payable
Including: Preference
shares
Perpetual
bonds
Lease liabilities 7,138,799.58 7,138,799.58
Long-term payable
Long-term employee
remuneration payable
Provision
Deferred income 115,101,158.13 115,101,158.13
Deferred income tax
liabilities 35,903,653.30 35,903,653.30
C&S Paper Co., Ltd. Semi-annual Report 2021
143
Other non-current
liabilities
Total non-current liabilities 151,004,811.43 158,143,611.01 7,138,799.58
Total liabilities 2,436,293,671.35 2,446,905,325.66 10,611,654.31
Owner’s equity:
Share capital 1,311,487,077.00 1,311,487,077.00
Other equity instruments
Including: Preference
shares
Perpetual
bonds
Capital reserve 907,006,505.05 907,006,505.05
Less: Treasury shares 96,480,911.29 96,480,911.29
Other comprehensive
income
Special reserves
Surplus reserves 61,469,258.27 61,469,258.27
General reserves
Retained earnings 2,858,664,147.39 2,858,664,147.39
Total equity attributable to
owners of the parent
company
5,042,146,076.42 5,042,146,076.42
Equities of minority
shareholders
Total owner’s equity 5,042,146,076.42 5,042,146,076.42
Total liabilities and owners’
equities 7,478,439,747.77 7,489,051,402.08 10,611,654.31
Explanation of adjustment
The Company started to adopt the New Lease Standards from January 1, 2021.
Balance sheet of the Parent Company
Unit: RMB
Item December 31, 2020 January 01, 2021 Adjustment number
Current assets:
Monetary funds 170,229,178.13 170,229,178.13
Tradable financial assets
Derivative financial
assets
Notes receivable
Accounts receivable 92,647,372.33 92,647,372.33
Accounts receivable
financing
Prepayments 7,940,396.34 7,940,396.34
Other receivables 136,987,584.64 136,987,584.64
C&S Paper Co., Ltd. Semi-annual Report 2021
144
Including: Interest
receivable
Dividends
receivable
Inventory 156,605,546.36 156,605,546.36
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 52,517,725.87 52,517,725.87
Total current assets 616,927,803.67 616,927,803.67
Non-current assets:
Investments in creditor’s
rights
Investments in other
creditor’s rights
Long-term receivable
Long-term equity
investment 1,928,113,219.50 1,928,113,219.50
Investment in other
equity instruments
Other non-current
financial assets
Investment property 17,939,329.51 17,939,329.51
Fixed assets 257,354,688.59 257,354,688.59
Construction work in
progress
Productive biological
assets
Oil & gas assets
Right-of-use assets 2,649,675.09 2,649,675.09
Intangible assets 25,205,232.21 25,205,232.21
Development expenses
Goodwill
Long-term deferred
expenses
Deferred income tax
assets 46,811,106.77 46,811,106.77
Other non-current assets 2,619,959.27 2,619,959.27
Total non-current assets 2,278,043,535.85 2,280,693,210.94 2,649,675.09
Total assets 2,894,971,339.52 2,897,621,014.61 2,649,675.09
Current liabilities:
Short-term borrowings
Tradable financial
liabilities
Derivative financial
C&S Paper Co., Ltd. Semi-annual Report 2021
145
liabilities
Notes payable
Accounts payable 420,061,168.44 420,061,168.44
Payments received in
advance
Contract liabilities 17,388,431.01 17,388,431.01
Employee remuneration
payable 44,678,713.21 44,678,713.21
Tax and fees payable 5,995,417.05 5,995,417.05
Other payables 126,072,040.24 126,072,040.24
Including: Interests
payable
Dividends
payable 1,437,466.77 1,437,466.77
Liabilities held for sale
Non-current liabilities
due within one year 967,707.49 967,707.49
Other current liabilities 2,260,496.03 2,260,496.03
Total current liabilities 616,456,265.98 617,423,973.47 967,707.49
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference
shares
Perpetual
bonds
Lease liabilities 1,681,967.60 1,681,967.60
Long-term payable
Long-term employee
remuneration payable
Provision
Deferred income 5,855,467.25 5,855,467.25
Deferred income tax
liabilities 7,202,336.33 7,202,336.33
Other non-current
liabilities
Total non-current liabilities 13,057,803.58 14,739,771.18 1,681,967.60
Total liabilities 629,514,069.56 632,163,744.65 2,649,675.09
Owner’s equity:
Share capital 1,311,487,077.00 1,311,487,077.00
Other equity instruments
Including: Preference
shares
Perpetual
bonds
C&S Paper Co., Ltd. Semi-annual Report 2021
146
Capital reserve 831,693,206.19 831,693,206.19
Less: Treasury shares 96,480,911.29 96,480,911.29
Other comprehensive
income
Special reserves
Surplus reserves 61,347,923.99 61,347,923.99
Retained earnings 157,409,974.07 157,409,974.07
Total owner’s equity 2,265,457,269.96 2,265,457,269.96
Total liabilities and owners’
equities 2,894,971,339.52 2,897,621,014.61 2,649,675.09
Explanation of adjustment
The Company started to adopt the New Lease Standards from January 1, 2021.
(4) Description on the retrospective adjustment of previous comparable data at the first time adoption of
the new leasing standards in 2021
□ Applicable √ Not applicable
45. Others: None
VI. Taxes
1. Main tax types and tax rates
Tax Tax basis Tax rate
Value-added tax
Taxable VAT (calculated based on the
difference of deducting the amount of
input tax which is allowed to be deducted
in the current period from the result of
multiplying taxable sales by applicable tax
rate)
13%
City construction and maintenance tax Turnover tax paid 5%. 7%
Corporate income tax Taxable income 15%, 16.5%, 20%, 25%, progressive rate
Education surcharges Turnover tax paid 3%
Local education surcharges Turnover tax paid 2%
Description of disclosure if different income tax rates apply to different corporate taxpayers
Name of taxpayer Income tax rate
C&S Paper Co., Ltd., Zhongshan Zhongshun Trading Co., Ltd.,
C&S (Hubei) Paper Co., Ltd., Xiaogan C&S Trading Co., Ltd.,
Zhejiang Zhongshun Paper Co., Ltd., Chengdu Zhongshun Paper
Co., Ltd., Hangzhou Jie Rou Trading Co., Ltd., Beijing C&S
Paper Co., Ltd., Sun Daily Necessities Co., Ltd., Shanghai
Huicong Paper Co., Ltd., Yunfu Hengtai Trading Co., Ltd., C&S
(Dazhou) Paper Co., Ltd., Dolemi Sanitary Products Co., Ltd.,
25%
C&S Paper Co., Ltd. Semi-annual Report 2021
147
C&S (Jiangsu) Paper Co., Ltd., Yunnan Dolemi Trading Co.,
Ltd., Luzhou Dolemi Sanitary Products Co., Ltd., and Mianyang
Dolemi Sanitary Products Co., Ltd.
C&S (Zhongshan) Paper Co., Ltd. 20%
Zhong Shun International Co., Ltd., and C&S Hong Kong Co.,
Ltd. (Note 1) 16.50%
Jiangmen Zhongshun Paper Co., Ltd., C&S (Sichuan) Paper Co.,
Ltd., and C&S (Yunfu) Paper Co., Ltd. 15%
C&S (Macao) Co., Ltd. (Note 2) Progressive rate
2. Tax incentive
Jiangmen Zhongshun Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2018, and
was awarded the Certificate of High-tech Enterprise (No. GR201844008474) on November 28, 2018, with a valid
term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting
period.
C&S (Sichuan) Paper Co., Ltd. was certified as a high-tech enterprise of Sichuan Province in 2020, and was
awarded the Certificate of High-tech Enterprise (No. GR202051001193) on September 11, 2020, with a valid
term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting
period.
C&S (Yunfu) Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2020, and was
awarded the Certificate of High-tech Enterprise (No. GR202044006774) on December 9, 2020, with a valid term
of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting period.
Pursuant to relevant provisions of the Announcement of the State Administration of Taxation and the Ministry of
Finance on the Implementation of Preferential Income Tax Policies for Small and Micro Enterprises and
Individual Industrial and Commercial Households (MOF and SAT Doc. No. 2021 [012]) and the Announcement
of the State Administration of Taxation on Issues Concerning the Implementation of Inclusive Income Tax
Reduction and Exemption Policies for Small and Low-profit Enterprises (SAT Doc. No. 2019 [002]), C&S
(Zhongshan) Paper Co., Ltd. is entitled to the inclusive income tax reduction and exemption policy for small and
low-profit enterprises in 2021. Specifically, if the annual taxable income does not exceed RMB1 million, the
taxable income is calculated at a reduced rate of 12.5% with a corporate income tax rate of 20%; if the annual
taxable income is over RMB1 million but less than RMB3 million, the taxable income is calculated at a reduced
rate of 50% while the corporate income tax rate is levied at 20%.
C&S Paper Co., Ltd. Semi-annual Report 2021
148
3. Others
Note 1: C&S Hong Kong Co., Ltd. is a Hong Kong-based company incorporated according to the laws of Hong
Kong, and adopts the tax laws thereof. The tax rate for its income tax is 16.50%;
Note 2: C&S (Macao) Co., Ltd. is a Macao-based company incorporated according to the laws of Macao. Its
complementary tax adopts a progressive rate (tax on taxable income that is less than MOP300,000 is exempted,
and the taxable income that is more than MOP300,000 is taxed at 12%).
VII. Notes to Items of the Consolidated Financial Statements
1. Monetary fund
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Cash on hand 56,626.99 36,349.55
Bank deposits 694,226,698.05 1,047,785,634.71
Other monetary funds 94,418,811.95 77,374,215.30
Total 788,702,136.99 1,125,196,199.56
Including: Total deposits in overseas
banks 30,091,357.87 99,311,423.25
Other description
Balance of other monetary funds at the end of the reporting period is the security deposit for issuing letters of
credit and bank acceptance bill and balance of Alipay. Refer to “Note VII (81)” for circumstances where
ownership of monetary funds is restricted.
2. Transactional financial assets: None
3. Derivative financial assets: None
4. Notes receivable
(1) Notes receivable presentation by category
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Bank acceptance bill 190,080.00 724,419.74
Trade acceptance bill 1,323,062.38 0.00
Total 1,513,142.38 724,419.74
C&S Paper Co., Ltd. Semi-annual Report 2021
149
Provision of bad debt reserve by portfolio: None
Provision of bad debt reserve by portfolio: None
Provision of bad debt reserve by portfolio
Description of reason for the portfolio:
If the bad debt reserve of notes receivable is set aside according to general model of expected credit loss, please
refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period: None
(3) Notes receivable that the Company has pledged at the end of the reporting period: None
(4) Notes receivable that the Company has endorsed or discounted at the end of the reporting period and
are not due on the balance sheet date: None
(5) Notes that are transferred to notes receivable because the drawer does not perform the contract at the
end of the reporting period: None
Other descriptions:
(1) The Company has no pledged notes receivable as at June 30, 2021.
(2) The Company has no derecognized notes receivable that are endorsed or discounted but not due as at June
30, 2021.
(3) The Company has no notes that are transferred to notes receivable because the drawer does not perform
the contract as at June 30, 2021.
(6) Notes receivable actually written off in the reporting period: None
5. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Type
Balance at the end of the year Balance at the beginning of the year
Book balance Impairment
provision Book
value
Book balance Impairment
provision Book value
Amount Percenta
ge Amount
Provision
ratio Amount
Percentag
e Amount
Provision
ratio
C&S Paper Co., Ltd. Semi-annual Report 2021
150
Accounts receivable
for which bad debt
reserve is set aside
individually
34,324,6
76.68 3.54%
10,681,0
68.59 31.12%
23,643,60
8.09
34,567,65
1.21 3.17%
10,681,06
8.59 30.90%
23,886,582.
62
Including:
Accounts receivable
for which bad debt
reserve is set aside in
portfolios
935,319,
040.34 96.46%
25,649,5
10.45 2.74%
909,669,5
29.89
1,054,953
,298.93 96.83%
27,415,94
1.96 2.60%
1,027,537,3
56.97
Including:
Portfolio based on
aging
935,319,
040.34 96.46%
25,649,5
10.45 2.74%
909,669,5
29.89
1,054,953
,298.93 96.83%
27,415,94
1.96 2.60%
1,027,537,3
56.97
Total 969,643,
717.02 100.00%
36,330,5
79.04 3.75%
933,313,1
37.98
1,089,520
,950.14 100.00%
38,097,01
0.55 3.50%
1,051,423,9
39.59
Bad debt reserve set aside individually: 10,681,068.59
Unit: RMB
Name Balance at the end of the period
Book balance Impairment provision Ratio of provision Reason for provision
Institution 1 6,116,636.66 2,462,996.13 40.27%
It is difficult to recover
all goods payments due
to the poor business
performance of the customer.
Institution 2 28,208,040.02 8,218,072.46 29.13%
It is difficult to recover
all goods payments due
to the poor business
performance of the
customer.
Total 34,324,676.68 10,681,068.59 -- --
Bad debt reserve set aside in portfolios: 25,649,510.45
Unit: RMB
Name Balance at the end of the period
Book balance Impairment provision Ratio of provision
Within the credit period 760,706,754.96 15,214,135.10 2.00%
Credit period - 1 year 168,688,133.48 8,434,406.67 5.00%
Subtotal of those within 1 year 929,394,888.44 23,648,541.77 2.54%
1 to 2 years 563,198.16 84,479.72 15.00%
2 to 3 years 4,732,949.69 1,419,884.91 30.00%
Over 3 years 628,004.05 496,604.05 79.08%
Total 935,319,040.34 25,649,510.45 --
Description of reason for the portfolio: Accounts receivable with the same aging have similar credit risk
characteristics.
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,
C&S Paper Co., Ltd. Semi-annual Report 2021
151
please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 929,394,888.44
1 to 2 years 563,198.16
2 to 3 years 4,732,949.69
Over 3 years 34,952,680.73
3 to 4 years 14,481,101.38
4 to 5 years 13,989,738.64
Over 5 years 6,481,840.71
Total 969,643,717.02
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Type
Balance at the
beginning of the
period
Amount of change in the reporting period Balance at the
end of the period Provision Recovery or
reversal Write-off Others
Accounts
receivable 38,097,010.55 -1,766,431.51 36,330,579.04
Total 38,097,010.55 -1,766,431.51 36,330,579.04
Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None
(3) Accounts receivable actually written off in the reporting period: None
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Name of institution Balance of accounts receivable at
the end of the period
Percentage in total balance of
accounts receivable at the end of
the period
Balance for bad debt reserve at
the end of the period
1st 240,902,755.98 24.84% 4,819,486.05
2nd 101,975,148.19 10.52% 3,063,592.00
3rd 54,259,924.13 5.60% 1,325,376.26
4th 31,518,078.02 3.25% 972,258.60
5th 28,969,449.44 2.99% 1,184,244.29
Total 457,625,355.76 47.20%
C&S Paper Co., Ltd. Semi-annual Report 2021
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(5) Accounts receivable derecognized due to transfer of financial assets
The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the
reporting period
(6) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts
receivable
The Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement of
accounts receivable as at the end of the reporting period.
Other description: None
6. Accounts receivable financing
Increase and decrease of accounts receivable financing and changes in fair value in the reporting period
□ Applicable √ Not applicable
If the provisions for asset impairment of accounts receivable financing are set aside according to general model of
expected credit loss, please refer to the disclosure method of other receivables to disclose relevant information on
provisions for asset impairment:
□ Applicable √ Not applicable
Other description: None
7. Prepayments
(1) Prepayments presentation by aging
Unit: RMB
Aging Balance at the end of the period Balance at the beginning of the period
Amount Percentage Amount Percentage
Within 1 year 12,804,377.00 99.76% 26,819,108.57 100.00%
1 to 2 years 30,210.00 0.24%
Total 12,834,587.00 -- 26,819,108.57 --
Explanation on the reason of untimely settlement of prepayments whose age exceeds one year with significant
amount: None
(2) Top five payees in closing balance of prepayment
The Company’s total prepayment amount of the top five payees in closing balance of prepayment is
C&S Paper Co., Ltd. Semi-annual Report 2021
153
RMB8,196,395.68, accounting for 63.86% of closing balance of prepayment.
Other description: None
8. Other receivables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Other receivables 21,117,810.56 15,824,945.56
Total 21,117,810.56 15,824,945.56
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable: None
2) Significant dividends receivable exceeding one year: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
Other description: None
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Nature Book balance at the end of the period Book balance at the beginning of the
period
Margins and deposits 4,398,979.17 4,621,457.93
Current accounts 5,255,892.23 5,350,546.55
Reserve 1,778,041.01 1,704,120.13
Others 12,000,234.22 5,999,332.44
C&S Paper Co., Ltd. Semi-annual Report 2021
154
Total 23,433,146.63 17,675,457.05
2) Provision of bad debt reserve
Unit: RMB
Bad debt provision
Phase I Phase II Phase III
Total Expected credit loss
in the next 12 months
Expected credit losses in
the whole duration (without
credit impairment)
Expected credit losses in
the whole duration (with
credit impairment)
Balance as at January 1,
2021 1,850,511.49 1,850,511.49
Balance as at January 1,
2021 in the reporting
period
—— —— —— ——
Provision in the reporting
period 464,824.58 464,824.58
Balance as at June 30,
2021 2,315,336.07 2,315,336.07
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 19,339,617.17
1 to 2 years 852,567.91
2 to 3 years 2,110,636.86
Over 3 years 1,130,324.69
3 to 4 years 1,058,637.44
4 to 5 years 27,454.05
Over 5 years 44,233.20
Total 23,433,146.63
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Type
Balance at the
beginning of the period
Amount of change in the reporting period Balance at the
end of the period Provision Recovery or
reversal Write-off Others
Other receivables 1,850,511.49 464,824.58 2,315,336.07
Total 1,850,511.49 464,824.58 2,315,336.07
C&S Paper Co., Ltd. Semi-annual Report 2021
155
Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
4) Other receivables actually written off in the reporting period: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Name of institution Nature of the amount Balance at the end of
the period Aging
Percentage in total
balance of other
receivables at the
end of the period
Balance of bad debt
reserve at the end of
the period
1st Others 9,460,860.30 Within 1 year 40.37% 473,043.02
2nd Margins and deposits 1,100,000.00 2-3 years 4.69% 330,000.00
3rd Margins and deposits 600,000.00 2-3 years 2.56% 180,000.00
4th Margins and deposits 600,000.00 3-4 years 2.56% 300,000.00
5th Margins and deposits 560,000.00
Within 1 year, 1-2
years, 2- 3 years, 3-4
years
2.39% 162,500.00
Total -- 12,320,860.30 -- 52.57% 1,445,543.02
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other
receivables: None
9. Inventory
Whether the Company needs to comply with requirements for disclosure in the real estate industry: No
(1) Classification of inventories
Unit: RMB
Item
Balance at the end of the period Balance at the beginning of the period
Book balance
Provision for
impairment of
inventories or
provision for
contract
performance cost
Book value Book balance
Provision for
impairment of
inventories or
provision for
contract
performance cost
Book value
Raw materials 1,070,227,399.23 185,609.86 1,070,041,789.37 1,148,312,808.05 133,039.11 1,148,179,768.94
Work-in-process
products 49,416,644.06 422,448.32 48,994,195.74 40,777,441.76 306,847.08 40,470,594.68
Commodity 435,922,026.80 2,524,005.70 433,398,021.10 410,313,722.29 2,738,280.52 407,575,441.77
C&S Paper Co., Ltd. Semi-annual Report 2021
156
stocks
Packages 33,282,071.36 284,363.42 32,997,707.94 32,644,525.84 145,489.07 32,499,036.77
Low-value
consumables 23,001,401.72 617,506.21 22,383,895.51 13,889,922.62 529,767.94 13,360,154.68
Materials for
consigned
processing
16,493,835.16 0.00 16,493,835.16 19,189,498.48 19,189,498.48
Total 1,628,343,378.33 4,033,933.51 1,624,309,444.82 1,665,127,919.04 3,853,423.72 1,661,274,495.32
(2) Provision for impairment of inventories or provision for contract performance cost
Unit: RMB
Item
Balance at the
beginning of the
period
Increase in the current period Decrease in the current period Balance at the
end of the period Provision Others Reversal or written off
Others
Raw materials 133,039.11 208,273.26 155,702.51 185,609.86
Work-in-process
products 306,847.08 288,779.68 173,178.44 422,448.32
Commodity
stocks 2,738,280.52 997,462.20 1,211,737.02 2,524,005.70
Packages 145,489.07 210,502.25 71,627.90 284,363.42
Low-value
consumables 529,767.94 313,992.36 226,254.09 617,506.21
Total 3,853,423.72 2,019,009.75 1,838,499.96 4,033,933.51
(3) Explanation that balance of inventory at the end of the reporting period includes amount of
capitalization of borrowing costs: None
(4) Explanation on amortized amount of contract performance cost in the reporting period: None
10. Contract assets
If the bad debt reserve of contrast assets is set aside according to general model of expected credit loss, please
refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Provision for impairment of contract assets in the reporting period: None
11. Assets held for sale
Unit: RMB
Item
Book balance at
the end of the
period
Impairment
provision
Book value at the
end of the period Fair value
Estimated
disposal fee
Estimated
disposal time
Immovable assets
of the old factory 57,073,059.69 57,073,059.69 66,285,118.00
December 31,
2021
C&S Paper Co., Ltd. Semi-annual Report 2021
157
of Hubei C&S
(including land
use rights)
Total 57,073,059.69 57,073,059.69 66,285,118.00 --
Other description:
In December 2019, in order to boost the investment and construction of Phase II of the high-end household paper
project in the industrial zone in the Economic Development Area of Xiaonan District, Xiaogan City, the Company
signed an agreement on the acquisition of the immovable assets in the old factory of Hubei C&S (including land
use rights) upon consultation with Xiaonan District People’s Government of Xiaogan City. The Company believed
that the immovable assets of the old factory of Hubei C&S (including land use rights) could be sold immediately
in the current situation, according to similar transactions where such assets were sold. The Company signed a
binding purchase agreement with Xiaogan Changxing Investment Co., Ltd. and Xiaonan District People’s
Government of Xiaogan City regarding the transfer of such assets in December 2019. The Agreement contained
important terms and conditions including the price and time of the transaction as well as penalty for breach of
contract that was strict enough. Therefore, there is little possibility for the agreement to be significantly changed
or canceled. The Company originally estimated that the ultimate transfer would be completed before December
2020. However, under the impact of the Covid-19 pandemic in 2020, the government shifted its focus to anti-
pandemic work with people’s interests above everything else. Especially, Xiaogan City of Hubei Province was one
of the hardest-hit areas, so the government has put all efforts in the fight against the virus and post-pandemic
economic rejuvenation. As a result, it was unable to pay all asset transfer amount within the agreed period. The
Company has received most of the asset transfer payment as of the reporting date (RMB58.14 million).
12. Non-current assets due within one year: None
13. Other current assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Wealth management products 50,000,000.00
Input VAT to be deducted 33,611,344.77 51,550,834.13
Prepaid corporate income tax 1,054,891.79 33,735.17
Total 34,666,236.56 101,584,569.30
Other description: None
C&S Paper Co., Ltd. Semi-annual Report 2021
158
14. Investments in creditor’s rights
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Other description: None
15. Other investments in creditor’s rights
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Other description: None
16. Long-term receivables
(1) Long-term receivables
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
(2) Long-term receivables derecognized due to the transfer of financial assets: None
(3) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of long-term
receivables: None
17. Long-term equity investment: None
18. Investment in other equity instruments: None
19. Other non-current financial assets: None
20. Investment property
(1) Investment property measured at cost
√ Applicable □ Not applicable
Unit: RMB
Item Properties and buildings Land use rights Construction work in
progress Total
I. Original Book Value
C&S Paper Co., Ltd. Semi-annual Report 2021
159
1. Balance at the
beginning of the period 31,072,632.92 21,661,131.29 52,733,764.21
2. Increase in the current
period
(1) External purchase
(2) Inventory\fixed
assets\transfer from
construction work in
progress
(3) Increase in business
combination
3. Decrease in the current
period
(1) Disposal
(2) Other transfers out
4. Balance at the end of
the period 31,072,632.92 21,661,131.29 52,733,764.21
II. Accumulated
Depreciation and
Amortization
1. Balance at the
beginning of the period 12,995,477.31 5,162,920.96 18,158,398.27
2. Increase in the current
period 486,421.32 232,020.78 718,442.10
(1) Provision or
amortization 486,421.32 232,020.78 718,442.10
3. Decrease in the current
period
(1) Disposal
(2) Other transfers out
4. Balance at the end of
the period 13,481,898.63 5,394,941.74 18,876,840.37
III. Impairment Provision
1. Balance at the
beginning of the period
2. Increase in the current
period
(1) Provision
3. Decrease in the current
period
(1) Disposal
(2) Other transfers out
4. Balance at the end of
the period
IV. Book Value
1. Book value at the end
of the period 17,590,734.29 16,266,189.55 33,856,923.84
2. Book value at the 18,077,155.61 16,498,210.33 34,575,365.94
C&S Paper Co., Ltd. Semi-annual Report 2021
160
beginning of the period
(2) Investment property measured at fair value
□ Applicable √ Not applicable
(3) Investment property that the certificate of title has not been issued
The Company does not have investment property that the certificate of title has not been issued as at June 30,
2021.
21. Fixed assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Fixed assets 3,182,792,165.52 2,792,587,302.21
Total 3,182,792,165.52 2,792,587,302.21
(1) Information on fixed assets
Unit: RMB
Item Properties and
buildings Equipment Office equipment Motor vehicles
Production
equipment Total
I. Original Book
Value
1. Balance at
the beginning of
the period
1,120,022,374.29 3,014,753,086.43 54,682,544.73 17,187,070.95 79,292,109.05 4,285,937,185.45
2. Increase in
the current period 212,097,885.51 330,616,989.41 3,206,098.62 2,207,607.08 14,719,985.94 562,848,566.56
(1) Purchase 207,340.70 2,356,163.74 2,207,607.08 5,605,888.51 10,377,000.03
(2)
Inventory\fixed
assets\transfer
from construction
work in progress
212,097,885.51 330,409,648.71 849,934.88 9,114,097.43 552,471,566.53
(3) Increase
in business
combination
3. Decrease in
the current period 6,500.00 24,662,638.49 151,431.82 498,872.65 25,319,442.96
(1) Disposal 6,500.00 24,662,638.49 151,431.82 498,872.65 25,319,442.96
C&S Paper Co., Ltd. Semi-annual Report 2021
161
or scrap
4. Balance at
the end of the
period
1,332,113,759.80 3,320,707,437.35 57,737,211.53 19,394,678.03 93,513,222.34 4,823,466,309.05
II. Accumulated
Depreciation
1. Balance at
the beginning of
the period
230,627,030.94 1,170,141,702.77 26,023,963.29 8,459,387.08 41,628,743.42 1,476,880,827.50
2. Increase in
the current period 23,017,434.76 128,699,060.47 4,229,425.08 833,983.50 5,604,732.32 162,384,636.13
(1) Provision 23,017,434.76 128,699,060.47 4,229,425.08 833,983.50 5,604,732.32 162,384,636.13
3. Decrease in
the current period 5,850.00 11,822,474.99 132,384.81 310,523.79 12,271,233.59
(1) Disposal
or scrap 5,850.00 11,822,474.99 132,384.81 310,523.79 12,271,233.59
4. Balance at
the end of the
period
253,638,615.70 1,287,018,288.25 30,121,003.56 9,293,370.58 46,922,951.95 1,626,994,230.04
III. Impairment
Provision
1. Balance at
the beginning of
the period
16,415,970.27 1,219.51 51,865.96 16,469,055.74
2. Increase in
the current period 2,285,297.81 2,285,297.81
(1) Provision 2,285,297.81 2,285,297.81
3. Decrease in
the current period 5,021,354.59 1,219.51 51,865.96 5,074,440.06
(1) Disposal
or scrap 5,021,354.59 1,219.51 51,865.96 5,074,440.06
4. Balance at
the end of the
period
13,679,913.49 13,679,913.49
IV. Book Value
1. Book value
at the end of the
period
1,078,475,144.10 2,020,009,235.61 27,616,207.97 10,101,307.45 46,590,270.39 3,182,792,165.52
2. Book value
at the beginning
of the period
889,395,343.35 1,828,195,413.39 28,657,361.93 8,727,683.87 37,611,499.67 2,792,587,302.21
C&S Paper Co., Ltd. Semi-annual Report 2021
162
(2) Information on temporarily idle fixed assets
Unit: RMB
Item Original book value Accumulated
depreciation
Impairment
provision Book value Remarks
Equipment 25,446,420.81 10,971,916.85 13,679,913.49 794,590.47
Total 25,446,420.81 10,971,916.85 13,679,913.49 794,590.47
(3) Fixed assets leased through operating
Unit: RMB
Item Book value at the end of the period
Machinery and equipment leased out through operating lease 574,633.12
Total 574,633.12
(4) Fixed assets that the certificate of title has not been issued
Unit: RMB
Item Book value Reasons for the certificate of title having
not been issued
Workshops of Zhejiang C&S 3,680,024.54 Processing
Plants and warehouses of Tangshan Branch 46,484,957.02 Processing
Workshops, warehouses, dormitories and
boilers of Hubei C&S Phase II project 155,491,394.59 Processing
Warehouse of Yunfu C&S 21,164,864.85 Processing
Total 226,821,241.00
Other description: There was no limitation on the ownership of fixed assets of the Company at the end of the
reporting period.
(5) Disposal of fixed assets: None
22. Construction work in process
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Construction work in process 55,534,528.69 275,904,617.95
Total 55,534,528.69 275,904,617.95
C&S Paper Co., Ltd. Semi-annual Report 2021
163
(1) Construction work in progress
Unit: RMB
Item
Balance at the end of the period Balance at the beginning of the period
Book balance Impairment
provision Book value Book balance
Impairment
provision Book value
Construction
work of C&S
Paper
443,396.21 443,396.21
Construction
work of Jiangmen
C&S
5,431,119.88 5,431,119.88 1,028,646.43 1,028,646.43
Construction
work of Zhejiang
C&S
5,309,309.84 5,309,309.84 249,608.17 249,608.17
Construction
work of Sichuan
C&S
5,760,144.05 5,760,144.05
Construction
work of Tangshan
Branch
100,858.68 100,858.68
Construction
work of Hubei
C&S
38,447,658.15 38,447,658.15 244,523,934.15 244,523,934.15
Construction
work of Yunfu
C&S
5,271,603.86 5,271,603.86 24,342,285.15 24,342,285.15
Construction
work of Jiangsu
C&S
530,582.07 530,582.07
Total 55,534,528.69 55,534,528.69 275,904,617.95 275,904,617.95
(2) Changes of significant construction work in progress in the current period
Unit: RMB
Item Budget
number
Balance
at the
beginnin
g of the
year
Increase
in the
current
period
Amount
of fixed
assets
transferr
ed in the
current
period
Decrease
in the
current
period
Balance
at the
end of
the year
Proporti
on of the
cumulati
ve
construct
ion input
in budget
Construc
tion
progress
Accumul
ative
amount
of
interest
capitaliz
ation
Includin
g:
Amount
of
interest
capitaliz
ation in
the
period
Interest
capitaliz
ation rate
in the
current
period
Source
of fund
Construc
tion
work of
C&S
Paper
470,000.
00
443,396.
21
443,396.
21 95.00% 95.00% Others
Construc
tion 22,376,5 1,028,64 20,641,8 16,239,3 5,431,11 96.84% 96.84% Others
C&S Paper Co., Ltd. Semi-annual Report 2021
164
work of
Jiangme
n C&S
05.11 6.43 13.10 39.65 9.88
Construc
tion
work of
Zhejiang
C&S
10,980,5
43.94
249,608.
17
10,040,7
25.49
4,981,02
3.82
5,309,30
9.84 93.71% 93.71% Others
Construc
tion
work of
Sichuan
C&S
13,386,5
63.41
5,760,14
4.05
6,086,37
2.24
11,846,5
16.29 100.00% 100.00% Others
Construc
tion
work of
Tangsha
n Branch
306,200,
000.00
3,122,52
0.35
3,021,66
1.67
100,858.
68 19.80% 19.80% Others
Construc
tion
work of
Hubei
C&S
1,353,00
0,000.00
244,523,
934.15
273,668,
529.01
479,744,
805.01
38,447,6
58.15 94.24% 94.24% Others
Construc
tion
work of
Yunfu
C&S
60,035,1
57.05
24,342,2
85.15
17,567,5
38.80
36,638,2
20.09
5,271,60
3.86 85.59% 85.59% Others
Construc
tion
work of
Jiangsu
C&S
695,600,
000.00
530,582.
07
530,582.
07 0.08% 0.08% Others
Total 2,462,04
8,769.51
275,904,
617.95
332,101,
477.27
552,471,
566.53
55,534,5
28.69 -- -- --
(3) Construction-in-progress provision set aside in the current period
There was no situation where the recoverable amount of the construction work in progress is lower than the book
value which required provisions in the Company in the reporting period.
(4) Construction materials: None
23. Productive biological assets
(1) Productive biological assets measured at cost
□ Applicable √ Not applicable
C&S Paper Co., Ltd. Semi-annual Report 2021
165
(2) Productive biological assets measured at fair value
□ Applicable √ Not applicable
24. Oil & gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
Unit: RMB
Item Housing Total
I. Original Book Value -
1. Balance at the beginning of the period 10,611,654.31 10,611,654.31
2. Increase in the current period 2,720,964.20 2,720,964.20
3. Decrease in the current period -
4. Balance at the end of the period 13,332,618.51 13,332,618.51
II. Accumulated Depreciation -
1. Balance at the beginning of the period -
2. Increase in the current period 2,181,245.94 2,181,245.94
(1) Provision 2,181,245.94 2,181,245.94
3. Decrease in the current period -
(1) Disposal -
4. Balance at the end of the period 2,181,245.94 2,181,245.94
IV. Book Value -
1. Book value at the end of the period 11,151,372.57 11,151,372.57
2. Book value at the beginning of the
period 10,611,654.31 10,611,654.31
Other description: None
26. Intangible assets
(1) Intangible assets
Unit: RMB
Item Land use right Patent right Non-patented
technology
Application
software Trademark right Total
I. Original Book
Value
1. Balance at
the beginning of
the period
189,064,322.15 1,342,721.84 18,819,434.67 168,370.83 209,394,849.49
2. Increase
in the current 208,301.89 2,961,517.07 3,169,818.96
C&S Paper Co., Ltd. Semi-annual Report 2021
166
period
(1)
Purchase 208,301.89 2,961,517.07 3,169,818.96
(2)
Internal R&D
(3)
Increase in
business
combination
3. Decrease in
the current period
(1)
Disposal
4. Balance at
the end of the
period
189,064,322.15 1,551,023.73 21,780,951.74 168,370.83 212,564,668.45
II. Accumulated
Amortization
1. Balance at
the beginning of
the period
29,450,960.14 885,237.05 9,534,509.23 168,370.83 40,039,077.25
2. Increase
in the current
period
1,898,651.76 52,125.56 1,375,371.84 3,326,149.16
(1)
Provision 1,898,651.76 52,125.56 1,375,371.84 3,326,149.16
3. Decrease
in the current
period
(1)
Disposal
4. Balance at
the end of the
period
31,349,611.90 937,362.61 10,909,881.07 168,370.83 43,365,226.41
III. Impairment
Provision
1. Balance at
the beginning of
the period
2. Increase
in the current
period
(1)
Provision
C&S Paper Co., Ltd. Semi-annual Report 2021
167
3. Decrease
in the current
period
(1) Disposal
4. Balance at
the end of the
period
IV. Book Value
1. Book
value at the end
of the period
157,714,710.25 613,661.12 10,871,070.67 169,199,442.04
2. Book
value at the
beginning of the
period
159,613,362.01 457,484.79 9,284,925.44 169,355,772.24
The intangible assets generated other than internal R&D of the Company at the end of the period occupy 0.00% of
the balance of intangible assets.
(2) Information on the land use rights that the certificate of title has not been issued: None
27. Development expenses: None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Name of investee
or the matters
forming goodwill
Balance at the
beginning of the
period
Increase in the current period Decrease in the current period
Balance at the
end of the period Formed by
business
combination
Disposal
Merger of
Zhongshan Paper
involving
enterprises not
under common
control
64,654.15 64,654.15
Total 64,654.15 64,654.15
(2) Provision for impairment of goodwill
Relevant information on the asset group or asset group portfolio in which the goodwill is located
Explain the method to confirm the process of goodwill impairment test, key parameters (e.g. the growth rate in the
predictive period when predicting the present value of future cash flow, the growth rate in the stable period, profit
C&S Paper Co., Ltd. Semi-annual Report 2021
168
rate, discount rate, and predictive period), and the goodwill impairment loss:
After conducting the asset impairment test by combining the goodwill with corresponding asset groups, there was
no impairment as at June 30, 2021, and provisions at the end of the reporting period were not set aside.
Influence of the goodwill impairment test
Other description: None
29. Long-term unamortized expenses
Unit: RMB
Item
Balance at the
beginning of the
period
Increase in the
current period
Amortized amount
of the current period Other decreases
Balance at the end of
the period
Use rights of sewage
discharge 2,308,598.93 692,579.70 1,616,019.23
Decoration fees of
office buildings 22,365,634.21 996,330.31 4,847,261.22 18,514,703.30
Electricity use rights 1,961,750.00 855,750.00 252,700.00 2,564,800.00
Total 26,635,983.14 1,852,080.31 5,792,540.92 22,695,522.53
Other description: None
30. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets that were not offset
Unit: RMB
Item
Balance at the end of the period Balance at the beginning of the period
Deductible temporary
differences
Deferred income tax
assets
Deductible temporary
differences
Deferred income tax
assets
Provision for asset
impairment 37,974,366.81 8,317,385.82 37,236,661.77 8,048,641.53
Unrealized profit in
internal transaction 57,005,616.36 11,349,710.74 59,038,241.84 11,427,908.55
Deductible loss 189,732,725.24 47,433,181.31 157,221,067.56 39,305,266.89
Accrued expenses 60,267,582.48 15,066,895.62 60,267,582.48 15,066,895.62
Provision for impairment
of fixed assets 13,679,913.49 2,339,937.78 16,469,055.74 2,795,038.08
Provision for impairment
of inventories 4,033,933.51 723,165.58 3,853,423.72 702,165.91
Equity incentive cost 212,634,286.41 51,669,774.75 136,647,479.87 33,312,991.30
Deferred income 33,105,520.64 8,276,380.16 2,833,819.12 708,454.78
Total 608,433,944.94 145,176,431.76 473,567,332.10 111,367,362.66
C&S Paper Co., Ltd. Semi-annual Report 2021
169
(2) Deferred income tax liabilities that were not offset
Unit: RMB
Item
Balance at the end of the period Balance at the beginning of the period
Taxable temporary
differences
Deferred income tax
liabilities
Taxable temporary
differences
Deferred income tax
liabilities
Pre-tax deduction of
fixed assets at one time
as stipulated in the tax
law
242,603,626.84 47,103,893.91 190,069,258.27 35,903,653.30
Total 242,603,626.84 47,103,893.91 190,069,258.27 35,903,653.30
(3) Presentation of deferred income tax assets or liabilities by the net amount after offset
Unit: RMB
Item
Offset amount of the
deferred income tax
assets and liabilities at
the end of the reporting
period
Balance of the deferred
income tax assets or
liabilities after offset at
the end of the reporting
period
Offset amount of the
deferred income tax
assets and liabilities at
the beginning of the
reporting period
Balance of the deferred
income tax assets or
liabilities after offset at
the beginning of the
reporting period
Deferred income tax
assets 145,176,431.76 111,367,362.66
Deferred income tax
liabilities 47,103,893.91 35,903,653.30
(4) Breakdown of unconfirmed deferred income tax assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Deductible temporary differences 671,548.30 2,710,860.27
Total 671,548.30 2,710,860.27
(5) Deductible losses of the unconfirmed deferred income tax assets due in the next year: None
31. Other non-current assets
Unit: RMB
Item
Balance at the end of the period Balance at the beginning of the period
Book balance Impairment
provision Book value Book balance
Impairment
provision Book value
Prepayment for software 1,192,660.18 1,192,660.18 2,027,042.24 2,027,042.24
Prepayment for engineering equipment 43,741,845.6
6
43,741,845.6
6
26,000,909.9
1
26,000,909.9
1
Total 44,934,505.8
4
44,934,505.8
4
28,027,952.1
5
28,027,952.1
5
Other description: None
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170
32. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Guaranteed borrowings 142,942,941.34
Total 142,942,941.34
Description of classification of short-term borrowings: None
(2) Short-term borrowings overdue but unpaid
Other description: There were no short-term borrowings overdue but unpaid in the Company at the end of the
reporting period.
33. Tradable financial liabilities: None
34. Derivative financial liabilities: None
35. Notes payable
Unit: RMB
Category Balance at the end of the period Balance at the beginning of the period
Banker’s acceptance 289,707,176.43 234,887,563.22
Total 289,707,176.43 234,887,563.22
The total amount of the notes payable due but unpaid at the end of the reporting period is RMB0.00.
36. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Accounts payable 723,033,087.39 761,519,389.26
Total 723,033,087.39 761,519,389.26
(2) Significant accounts payable with aging over one year
Other description: The Company has no significant accounts payable with aging over one year at the end of the
reporting period.
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171
37. Payments received in advance
(1) List of payments received in advance: None
(2) Significant payments received in advance with aging over one year
The Company has no significant payments received in advance with aging over one year at the end of the
reporting period.
38. Contract liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Advances on sales 103,501,369.49 137,333,617.40
Total 103,501,369.49 137,333,617.40
Amount with significant changes in book value during the reporting period and reason: None
39. Employee remuneration payable
(1) List of employee remuneration payable
Unit: RMB
Item Balance at the beginning
of the period
Increase in the current
period
Decrease in the current
period
Balance at the end of the
period
I. Short-term
Compensation 123,506,119.43 397,444,239.77 409,820,099.96 111,130,259.24
II. Post-employment
Benefits - Defined
Contribution Plan
18,507.68 25,494,529.67 25,142,907.14 370,130.21
III. Dismissal Benefits 156,259.98 156,259.98
Total 123,524,627.11 423,095,029.42 435,119,267.08 111,500,389.45
(2) List of short-term remuneration
Unit: RMB
Item Balance at the beginning
of the period
Increase in the current
period
Decrease in the current
period
Balance at the end of the
period
1. Salary, bonus and
subsidy 122,595,782.24 361,113,483.15 375,743,596.02 107,965,669.37
2. Employee welfare 13,078,772.04 11,949,297.53 1,129,474.51
3. Social insurance
premiums 252,766.51 12,926,746.92 12,344,203.08 835,310.35
Including: Medical 250,105.53 10,975,075.83 10,409,117.65 816,063.71
C&S Paper Co., Ltd. Semi-annual Report 2021
172
insurance
Employment
injury insurance 167.06 1,142,952.97 1,125,343.83 17,776.20
Maternity
insurance 2,493.92 808,718.12 809,741.60 1,470.44
4. Housing provident
fund 374,311.00 8,527,072.24 8,542,073.24 359,310.00
5. Labor union fee and
staff education fee 283,259.68 1,798,165.42 1,240,930.09 840,495.01
Total 123,506,119.43 397,444,239.77 409,820,099.96 111,130,259.24
(3) List of defined contribution plans
Unit: RMB
Item Balance at the beginning
of the period
Increase in the current
period
Decrease in the current
period
Balance at the end of the
period
1. Basic endowment
insurance 17,927.54 24,671,585.74 24,331,167.43 358,345.85
2. Unemployment
insurance 580.14 822,943.93 811,739.71 11,784.36
Total 18,507.68 25,494,529.67 25,142,907.14 370,130.21
Other description: There was no delinquency of employee remuneration payable in the Company at the end of the
reporting period.
40. Tax and fees payable
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Value-added tax 29,179,356.47 25,574,167.63
Corporate income tax 36,669,532.30 79,266,423.94
Individual income tax 2,196,145.64 1,840,329.83
City construction and maintenance tax 1,837,733.39 1,593,768.94
Property tax 3,958,770.37 1,087,129.90
Education surcharges 877,842.66 829,794.94
Local education surcharges 585,228.48 524,068.91
Land use tax 821,151.63 796,430.89
Stamp tax 692,502.21 596,629.80
Security fund for the disabled 680,567.93 334,989.76
Environmental protection tax 132,841.63 97,465.13
Resource tax 66,031.66 66,855.20
Total 77,697,704.37 112,608,054.87
C&S Paper Co., Ltd. Semi-annual Report 2021
173
Other description: None
41. Other payables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Dividend payable 1,594,446.41 1,437,466.77
Other payables 794,796,554.04 753,407,113.32
Total 796,391,000.45 754,844,580.09
(1) Interest payable: None
(2) Dividends payable
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Dividends for restricted shares 1,594,446.41 1,437,466.77
Total 1,594,446.41 1,437,466.77
Other descriptions, including important dividends payable exceeding one year, and the reasons for non-payment
that should be disclosed: None
(3) Other payables
1) Other payables based on amount nature
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Margins and deposits 22,073,998.74 20,964,424.40
Unpaid fees 731,510,591.33 658,391,225.24
Others 2,144,169.58 2,373,791.75
Repurchase obligation of restricted shares 39,067,794.39 68,800,189.53
Authorized collection and payment of
individual income tax under the equity
incentive
2,877,482.40
Total 794,796,554.04 753,407,113.32
2) Other important payables with aging exceeding one year
Unit: RMB
Item Balance at the end of the period Reason for unsettlement or not carry-over
1st 6,323,465.21 Not yet settled
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174
Total 6,323,465.21 --
Other description: None
42. Liabilities held for sale: None
43. Non-current liabilities due within one year
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Lease liabilities due within one year 6,038,594.62 3,472,854.73
Total 6,038,594.62 3,472,854.73
Other description: None
44. Other current liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Tax pending changeover 13,400,882.00 17,628,086.63
Total 13,400,882.00 17,628,086.63
Changes in short-term bonds payable: None
45. Long-term borrowings
(1) List of long-term borrowings
Description of classification of long-term borrowings: None
Other descriptions, including the interval of interest rate: None
46. Bonds payable
(1) Bonds payable: None
(2) Changes in the increase and decrease of the bonds payable (excluding other financial instruments such
as preference shares and perpetual bonds that are divided into financial liabilities): None
(3) Descriptions of the conditions for converting conditions and time of converting bonds: None
(4) Descriptions of other financial instruments that are divided into financial liabilities: None
Basic information on other financial instruments in issue at the end of the reporting period, such as the preference
shares and perpetual bonds: None
C&S Paper Co., Ltd. Semi-annual Report 2021
175
Table of changes in other financial instruments in issue at the end of the reporting period, such as the preference
shares and perpetual bonds: None
47. Lease liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Housing rent 5,526,106.56 7,138,799.58
Total 5,526,106.56 7,138,799.58
Other description: None
48. Long-term payables: None
(1) Long-term payables listed based on amount nature: None
(2) Special payables: None
49. Long-term employee remuneration payable
(1) Table of long-term employee remuneration payable: None
(2) Changes of the defined benefit plan
Description of content and associated risk of defined benefit plan and the impact on the Company’s future cash
flow, time and uncertainty: None
Description of major actuarial assumptions and sensitivity analysis results of defined benefit plan: None
Other description: None
50. Projected liabilities: None
51. Deferred income
Unit: RMB
Item
Balance at the
beginning of the
period
Increase in the
current period
Decrease in the
current period
Balance at the end of
the period Reason
Government grants 115,101,158.13 4,000,000.00 7,008,167.50 112,092,990.63 Government grants
related to assets
Total 115,101,158.13 4,000,000.00 7,008,167.50 112,092,990.63 --
Projects involving government grants:
C&S Paper Co., Ltd. Semi-annual Report 2021
176
Unit: RMB
Liability item
Balance at
the beginning of the period
Increased
amount of
grants in the
current
period
Amount
included in
non-
operating
income in the
current period
Amount
included in
other income
in the current
period
Amount of
offset costs in
the current
period
Other
changes
Balance at
the end of the period
Related to
asset/income
Support
funds for
sewage
centralized
water
treatment project
972,000.00 60,750.00 911,250.00 Related to
asset
Ex-post funds
awarded to
the first batch
of the union
enterprises
for technical
transformatio
n in 2017
4,081,579.34 317,293.32 3,764,286.02 Related to
asset
Support
funds for the
technical
transformatio
n of
equipment
production line
3,640,736.00 403,311.72 3,237,424.28 Related to
asset
Support
funds for
enterprise
technical upgrading
3,219,688.10 396,187.14 2,823,500.96 Related to
asset
Subsidies for
the
infrastructure
construction
of new
factory in Hubei
30,535,934.0
0 535,718.16
30,000,215.8
4
Related to
asset
Provincial
funds for
traditional
industry
transformation projects
910,714.30 53,571.42 857,142.88 Related to asset
Subsidies for
the expansion
of the high-
grade
household
paper project
with an
annual output
of 25,000 tons
1,906,666.83 79,999.98 1,826,666.85 Related to
asset
Discount
interest funds
for imported
2,439,593.75 96,937.50 2,342,656.25 Related to
asset
C&S Paper Co., Ltd. Semi-annual Report 2021
177
equipment
Financial
support funds
for
construction
expansion of
25,000-ton
high-grade
household paper project
7,453,253.75 312,723.90 7,140,529.85 Related to
asset
Subsidies for
construction
of the water
treatment
project
1,369,861.36 77,539.32 1,292,322.04 Related to
asset
Subsidies for
sewage
treatment station
2,664,772.67 238,636.38 2,426,136.29 Related to
asset
Special funds
for capacity
expansion of
25,000-ton
high-grade
household paper project
1,820,833.22 287,500.02 1,533,333.20 Related to
asset
Support
funds for the
construction
of
environmenta
l protection facilities
3,032,539.79 159,523.80 2,873,015.99 Related to
asset
Support
funds for
equipment of
Phase II project
9,467,571.00 985,624.08 8,481,946.92 Related to
asset
Support
funds for the
transformatio
n of Phase I project
16,172,657.65
1,125,711.24 15,046,946.4
1 Related to asset
Support
funds for the
construction
of Automated
Storage &
Retrieval
System
21,188,970.58
780,882.36 20,408,088.2
2 Related to asset
Funds for
reconstructio
n project of
automatic
production lines
1,389,966.67 510,600.00 879,366.67 Related to
asset
Subsidy
funds for the
smart factory project
2,833,819.12 4,000,000.00 585,657.16 6,248,161.96 Related to
asset
Total 115,101,158.
13 4,000,000.00 7,008,167.50
112,092,990.63
C&S Paper Co., Ltd. Semi-annual Report 2021
178
52. Other non-current liabilities: None
53. Share capital
Unit: RMB
Balance at the
beginning of the
period
Increase and decrease of this change (+ and -)
Balance at the
end of the
period
Issuance of
additional
shares
Bonus
shares
Shares
transferred
from surplus
reserve
Others Subtotal
Total number
of shares 1,311,487,077.00 1,578,199.00 -2,021,305.00 -443,106.00
1,311,043,971.
00
Other description: For details about changes in the Company’s share capital in the reporting period, please refer to
“1. Development history of the Company in III. Basic Information of the Company of Section X” for details.
54. Other equity instruments
(1) Basic information on other financial instruments in issue at the end of the reporting period, such as the
preference shares and perpetual bonds: None
(2) Table of changes in other financial instruments in issue at the end of the reporting period, such as the
preference shares and perpetual bonds
Description of increase/decrease of other equity instruments in the reporting period, reasons of change, and
accounting basis: None
Other description: None
55. Capital reserve
Unit: RMB
Item Balance at the beginning
of the period
Increase in the current
period
Decrease in the current
period
Balance at the end of the
period
Capital premium (share
premium) 626,797,181.97 15,730,354.61 6,730,945.65 635,796,590.93
Other capital reserve 280,209,323.08 28,643,935.91 3,024,288.84 305,828,970.15
Total 907,006,505.05 44,374,290.52 9,755,234.49 941,625,561.08
Other descriptions, including increase/decrease in the reporting period and reasons of change:
(1) The exercise of stock options awarded in the first grant and the exercise of reserved stock options as per the
2018 Stock Option and Restricted Stock Incentive Plan increased “capital reserve-share premium” by
RMB15,730,354.61 and decreased “capital reserve-other capital reserve” by RMB3,024,288.84. The repurchase
and deregistration of incentive stocks decreased “capital reserve-other capital reserve” by RMB6,730,945.65.
C&S Paper Co., Ltd. Semi-annual Report 2021
179
(2) The Company set aside provision for equity incentive costs and fees in the reporting period and
RMB12,167,835.66 was included in “capital reserve - other capital reserve”. Difference between the deductible
amount before tax under the 2018 Stock Option and Restricted Stock Incentive Plan and recognized book expense
was confirmed as deferred income tax asset and RMB16,476,100.25 was included in “capital reserve - other
capital reserve”.
56. Treasury shares
Unit: RMB
Item Balance at the beginning
of the period
Increase in the current
period
Decrease in the current
period
Balance at the end of the
period
Restricted shares 68,800,189.53 1,352,409.36 31,084,804.50 39,067,794.39
Ordinary shares 27,680,721.76 532,605,631.91 560,286,353.67
Total 96,480,911.29 533,958,041.27 31,084,804.50 599,354,148.06
Other descriptions, including increase/decrease in the reporting period and reasons of change:
Notes: (1) The second unlock period unlocked 4,809,045 shares of first-grant stock options at RMB4.33/share
granted under the 2018 Stock Option and Restricted Stock Incentive Plan. Totally RMB20,823,164.85 was
included in the decrease of the current period. As some incentive recipients for stocks awarded in the first grant
left the Company or failed to pass the appraisal, the Company repurchased and deregistered 2,021,305 shares with
RMB4.33 per share and a total amount of RMB8,752,250.65, which was included in the decrease of the current
period. Cash dividends waiting to be issued to holders of restricted shares can be withdrawn. For holders of
restricted shares that are expected to be unlocked in the future, RMB1,509,389.00 was included in the decrease of
the current period.
(2) A cash dividend of RMB400,218.39 was withdrawn for shares originally held by repurchase and deregistration
recipients and therefore included in the increase of the current period; a cash dividend of RMB952,190.97 for
shares unlocked in the second unlock period was included in the increase of the current period.
(3) The Company has carried out share repurchase with a special securities repurchase account via centralized
bidding, with a total transaction amount of RMB532,605,631.91.
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180
57. Other comprehensive income: None
58. Special reserves: None
59. Surplus reserve
Unit: RMB
Item Balance at the beginning
of the period
Increase in the current
period
Decrease in the current
period
Balance at the end of the
period
Statutory surplus reserve 61,469,258.27 61,469,258.27
Total 61,469,258.27 61,469,258.27
Explanation of surplus reserves, including increase/decrease in the reporting period and reasons of change: None
60. Retained earnings
Unit: RMB
Item Current period Last period
Retained earnings before adjustment at the end of
the last period 2,858,664,147.39 2,058,968,835.80
Retained earnings at the beginning of the period
after adjustment 2,858,664,147.39 2,058,968,835.80
Plus: Net profit attributable to owners of the
parent company of the current period 407,161,317.15 452,699,484.61
Dividends on ordinary shares payable 128,751,529.41 97,945,986.16
Retained earnings at the end of the period 3,137,073,935.13 2,413,722,334.25
Details on adjusting retained earnings at the beginning of the period:
(1) As a result of retrospective adjustments according to the Accounting Standards for Business Enterprises and its
related new provisions, the impact on retained earnings at the beginning of the period was RMB0.00.
(2) Due to the changes in accounting policies, the impact on retained earnings at the beginning of the period was
RMB0.00.
(3) Due to the correction of material accounting errors, the impact on retained earnings at the beginning of the
period was RMB0.00.
(4) Due to the changes in the scope of combination caused by the same control, the impact on retained earnings at
the beginning of the period was RMB0.00.
(5) Other adjustments affected retained earnings at the beginning of the period by a total of RMB0.00.
C&S Paper Co., Ltd. Semi-annual Report 2021
181
61. Operating income and operating cost
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Income Cost Income Cost
Principal business 4,123,177,610.49 2,462,562,811.28 3,600,704,841.94 1,918,216,266.98
Other businesses 124,464,225.89 99,681,354.93 15,496,557.86 13,190,651.18
Total 4,247,641,836.38 2,562,244,166.21 3,616,201,399.80 1,931,406,918.16
Information related to income:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 4,247,641,836.38 4,247,641,836.38
Including:
Household paper 4,082,881,792.19 4,082,881,792.19
Personal care 40,295,818.30 40,295,818.30
Others 124,464,225.89 124,464,225.89
By operating region 4,247,641,836.38 4,247,641,836.38
Including:
Domestic 4,149,892,689.00 4,149,892,689.00
Abroad 97,749,147.38 97,749,147.38
Including:
Including:
Including:
Including:
Including:
Total 4,247,641,836.38 4,247,641,836.38
Information related to performance obligation: None
Information related to the transaction price apportioned to the remaining performance obligation:
The amount of income corresponding to the obligations of contract performance with an executed contract that is
not performed or fully performed at the end of the reporting period is RMB10,852,118.31, of which the income of
RMB10,852,118.31 is expected to be confirmed as income in the year of 2021.
Other description: None
62. Tax and surcharges
Unit: RMB
Item Incurred in the current period Incurred in the prior period
City construction and maintenance tax 10,406,083.91 9,361,201.41
C&S Paper Co., Ltd. Semi-annual Report 2021
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Education surcharges 4,922,998.46 4,706,053.57
Resource tax 55,344.16
Property tax 5,361,355.73 4,767,707.05
Land use tax 1,364,954.29 1,746,360.26
Vehicle and vessel tax 9,030.00 12,360.00
Stamp tax 3,544,054.89 3,007,283.02
Local education surcharges 3,281,999.30 3,137,369.06
Environmental protection tax 305,183.69 181,672.99
Total 29,251,004.43 26,920,007.36
Other description: None
63. Selling expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 188,440,219.32 134,986,732.37
Advertising expenses 136,856,089.50 74,270,803.62
Product promotion fees 486,488,574.50 411,196,541.39
Shopping mall management fees 42,603,638.54 48,753,624.04
Transportation expenses 44,766,089.36 165,690,045.64
Traveling expenses 9,543,610.64 4,940,998.20
Business entertainment expenses 899,984.09 436,080.12
Rental fees 4,279,089.03 3,183,544.55
Others 1,601,356.74 4,612,712.67
Total 915,478,651.72 848,071,082.60
Other description: None
64. Administrative expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 74,061,162.35 70,379,157.38
Equity incentive cost 12,167,835.66 52,983,211.08
Depreciation and amortization fees 34,639,880.19 31,544,768.00
Office allowance 12,660,998.77 10,475,476.21
Consulting service fees 8,688,604.92 4,773,171.55
Outsourcing warehouse management fees 8,791,106.82 5,349,303.92
Business entertainment expenses 2,582,730.40 1,580,927.02
Traveling expenses 950,329.72 393,381.65
Environmental protection fees 1,244,274.84 1,251,298.69
Rental fees 3,679,190.64 1,475,930.22
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Others 5,733,964.07 5,495,228.29
Total 165,200,078.38 185,701,854.01
Other description: None
65. R&D expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 18,956,073.80 17,174,899.12
Direct investment 62,873,043.34 59,534,214.24
Depreciation and amortization fees 13,685,779.13 12,202,630.08
Others 1,899,916.05 1,949,084.80
Total 97,414,812.32 90,860,828.24
Other description: None
66. Finance expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Interest fees 975,546.01 1,140,788.29
Less: Interest income 6,623,270.61 4,060,998.02
Exchange profit and loss 1,346,250.22 -993,705.23
Plus: Transaction fee 2,498,330.34 2,891,912.73
Total -1,803,144.04 -1,022,002.23
Other description: None
67. Other income
Unit: RMB
Sources of other income Incurred in the current period Incurred in the prior period
Refund of individual income tax 1,137,762.21 696,845.15
Support funds for the transformation of
Phase I project 1,125,711.24 224,780.22
Subsidies for R&D, famous-brand and
high-quality products, and
income/efficiency increase
1,020,000.00
Support funds for equipment of Phase II
project 985,624.08 985,624.08
Support funds for the construction of
Automated Storage & Retrieval System 780,882.36 192,647.06
Support funds for technical upgrading
project 2020 700,000.00
Subsidy funds for the smart factory project 585,657.16
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Subsidies for the infrastructure
construction of new factory in Hubei 535,718.16 535,718.16
Funds for reconstruction project of
automatic production lines 510,600.00
Subsidies for internship, employment, job
stabilization and training 489,780.86
VAT exemption for employment of retired
soldiers and poor population 411,700.00 438,350.00
Support funds for the technical
transformation of equipment production
line
403,311.72 403,311.72
Provincial support funds for enterprise
technical upgrading 396,187.14 264,124.76
Ex-post funds awarded to the first batch of
the union enterprises for the technical
transformation in 2017
317,293.32 317,293.32
Financial support funds for construction
expansion of 25,000-ton high-grade
household paper project
312,723.90 312,723.90
Special funds for capacity expansion of
25,000-ton high-grade household paper
project
287,500.02 287,500.02
Technical demonstration fee for water
intake points 280,000.00
Subsidies for sewage treatment station 238,636.38 238,636.38
Special award funds for the restructuring
of industrial enterprises 210,900.00
Support funds for the construction of
environmental protection facilities 159,523.80 159,523.80
Tax contribution reward 100,000.00
Subsidies for job creation for the poor 97,995.00
Discount interest funds for imported
equipment 96,937.50 96,937.50
Subsidies for the expansion of the high-
grade household paper project with an
annual output of 25,000 tons
79,999.98 79,999.98
Subsidies for construction of the water
treatment project 77,539.32 77,539.32
Rewards for creation of odor-free
enterprise 62,752.29
Support funds for sewage centralized water
treatment project 60,750.00 60,750.00
Provincial funds for traditional industry
transformation projects 53,571.42 35,714.28
Financial rewards for cleaner production
transformation 50,000.00
Rewards for demonstration enterprise of
informatization and industrialization
integration
50,000.00
C&S Paper Co., Ltd. Semi-annual Report 2021
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Subsidies for employment and
entrepreneurship 31,604.66
Subsidies for encouraging scaled
development of enterprises 20,000.00
Subsidies for new exports of exporting
enterprises 700.00
Awards for breakthroughs with increases in
business revenues 300,000.00
Subsidies for photovoltaic power rooftop 224,640.00
Financial support funds for industry
collaboration 7,892,985.55
Support policy rewards of 2018 from the
Bureau of Economy and Information
Technology Pengzhou City
1,310,000.00
Energy efficiency special fund 2019 of the
Science, Industry and Commerce Bureau
(cleaner production enterprise)
20,000.00
Management system certification rewards
2018 of Pengzhou Administration for
Market Regulation
10,000.00
Subsidies for pandemic prevention system
construction of enterprises by Bureau of
Economy and Information Technology
Pengzhou City
9,000.00
Total 11,671,362.52 15,174,645.20
68. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Others 358,473.15 2,287,274.87
Total 358,473.15 2,287,274.87
Other description: “Others” refer to returns on principal-protected wealth management products at maturity and
reverse repo of treasury bonds of the Company.
69. Profit of net exposure hedging: None
70. Income from changes in fair value: None
71. Credit impairment loss
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Bad debt loss from other receivables -464,824.58 -1,502,718.88
Bad debt loss from accounts receivable 1,766,431.51 79,019.13
C&S Paper Co., Ltd. Semi-annual Report 2021
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Total 1,301,606.93 -1,423,699.75
Other description: None
72. Asset impairment loss
Unit: RMB
Item Incurred in the current period Incurred in the prior period
II. Impairment Loss of Inventories and
Contract Performance Cost -468,530.30 -850,381.40
V. Impairment Loss of Fixed Assets -2,285,297.81
Total -2,753,828.11 -850,381.40
Other description: None
73. Return on disposal of assets
Unit: RMB
Source Incurred in the current period Incurred in the prior period
Disposal of fixed assets -259,896.46 -896,870.05
Total -259,896.46 -896,870.05
74. Non-operating income
Unit: RMB
Item Incurred in the current period Incurred in the prior period Amount recognized as profit or
loss of the current period
Government grants 23,000.00 1,997,067.57 23,000.00
Income from fine and
compensation 907,005.44 640,155.42 907,005.44
Profit from damage and
retirement of non-current assets 98,166.07 1,758.21 98,166.07
Including: Fixed assets 98,166.07 1,758.21 98,166.07
Others 680,195.03 530,259.96 680,195.03
Total 1,708,366.54 3,169,241.16 1,708,366.54
Government grants recognized as profit and loss of the current period:
Unit: RMB
Grants Issuer Reason Nature and
type
Whether the
grant affected
the profit and
loss of the
year
Whether a
special grant
Amount
incurred in
the current
period
Amount
incurred in
the last
period
Related to
asset/income
Rewards for
advanced
party
organizations
and
People’s
Government
of
Shuangshui
Town, Xinhui
Grant
Grants
received for
the
performance
of the State’s
No No 2,000.00 Related to
income
C&S Paper Co., Ltd. Semi-annual Report 2021
187
individuals
2020
District,
Jiangmen
City
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
Subsidies for
enterprises’
employee
training for
job
adaptation
Human
Resources
and Social
Security
Bureau of
Yunfu City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 21,000.00 Related to
income
Subsidies for
job
stabilization
Labor and
Employment
Administratio
n of Xiaonan
District,
Xiaogan City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 291,200.00 Related to
income
Subsidies for
job
stabilization
Labor and
Employment
Administratio
n of Xiaonan
District,
Xiaogan City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 27,200.00 Related to
income
Social
security
subsidies for
enterprises
Labor and
Employment
Administratio
n of Xiaonan
District,
Grant
Grants
received for
the
performance
of the State’s
function of
No No 37,332.00 Related to
income
C&S Paper Co., Ltd. Semi-annual Report 2021
188
Xiaogan City ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
Special
award funds
for the
restructuring
of industrial
enterprises
Central
Treasury
Payment
Center of
Xiaogan City,
Xiaonan
District
Reward
Grants
received as a
result of
compliance
with local
government
policies such
as investment
attraction and
other local
support
policies
No No 410,000.00 Related to
income
Subsidies for
job
stabilization
Labor and
Employment
Administratio
n of
Pengzhou
City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 29,142.57 Related to
income
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Hangzhou
Municipal
Employment
Service
Center
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 887.00 Related to
income
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Employment
Management
Service
Office of
Pinghu City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
No No 389,857.30 Related to
income
C&S Paper Co., Ltd. Semi-annual Report 2021
189
of a public
utility or
socially
necessary
product
Subsidies for
job
stabilization
Social
Insurance
Fund
Administratio
n of Chengdu
City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 245,515.30 Related to
income
One-off
employment
subsidy
Human
Resources
and Social
Security
Bureau of
Luoding City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 238,317.87 Related to
income
Subsidies for
job
stabilization
Social
Insurance
Bureau of
Yutian
County
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 87,935.77 Related to
income
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Human
Resources
and Social
Security
Bureau of
Yunfu City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
No No 72,684.00 Related to
income
C&S Paper Co., Ltd. Semi-annual Report 2021
190
utility or
socially
necessary
product
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Social
Insurance
Fund
Administratio
n of
Zhongshan
City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 50,801.57 Related to
income
Employee
subsidies for
enterprises
with work
and
production
resumption
Dongsheng
Branch of the
Human
Resources
and Social
Security
Bureau of
Zhongshan
City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 40,400.00 Related to
income
Enterprise
training
subsidy from
the Fourth
Technical
School of
Xiaogan City
Fourth
Technical
School of
Xiaogan City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 33,000.00 Related to
income
Subsidies for
Covid-19
prevention
and control
Financial
Payment
(Accounting)
Center of
Jiaxing Port
District
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
No No 19,750.00 Related to
income
C&S Paper Co., Ltd. Semi-annual Report 2021
191
socially
necessary
product
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Social
Insurance
Fund
Administratio
n of Yunfu
City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 16,343.00 Related to
income
Security
social
services
Development
and
Construction
Management
Committee of
Port District,
Jiaxing City
Grant
Grants
received as a
result of
compliance
with local
government
policies such
as investment
attraction and
other local
support
policies
No No 5,000.00 Related to
income
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Human
Resources
and Social
Security
Bureau of
Luoding City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
No No 1,500.00 Related to
income
Job
stabilization
subsidy from
the
Unemployme
nt Insurance
Fund
Dongsheng
Branch of the
Human
Resources
and Social
Security
Bureau of
Zhongshan
City
Grant
Grants
received for
the
performance
of the State’s
function of
ensuring the
supply or
price control
of a public
utility or
socially
necessary
No No 118.16 Related to
income
C&S Paper Co., Ltd. Semi-annual Report 2021
192
product
Funds for
promoting
industrial
development
Finance
Bureau of
Yunfu City
Grant
Grants
received as a
result of
compliance
with local
government
policies such
as investment
attraction and
other local
support
policies
No No 83.03 Related to
income
Total 23,000.00 1,997,067.57
Other description: None
75. Non-operating expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period Amount recognized as profit or
loss of the current period
External donations 1,760,851.30 11,952,705.59 1,760,851.30
Others 1,152,018.68 1,267,171.07 1,152,018.68
Loss from damage and
retirement of non-current assets 725,313.88 20,306.50 725,313.88
Including: Fixed assets 725,313.88 20,306.50 725,313.88
Total 3,638,183.86 13,240,183.16 3,638,183.86
Other description: None
76. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Current income tax expense 87,232,248.96 76,953,980.75
Deferred income tax expense -6,132,728.24 8,829,273.17
Total 81,099,520.72 85,783,253.92
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Item Incurred in the current period
Total profit 488,244,168.07
Income tax expenses calculated at the statutory/applicable tax 122,061,042.02
C&S Paper Co., Ltd. Semi-annual Report 2021
193
rate
Impacts of different tax rates applied to subsidiaries -40,492,083.06
Impacts of adjustments to income taxes during the prior period -1,905,505.90
Impacts of non-deductible costs, expenses and losses 1,436,067.66
Income tax expenses 81,099,520.72
Other description: None
77. Other comprehensive income
Please refer to the notes for details.
78. Items of the cash flow statement
(1) Cash received related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Current accounts 10,003,853.92 12,564,390.63
Fiscal appropriation 7,136,732.81 36,365,077.82
Interest income 6,623,270.61 4,060,998.02
Authorized collection of individual income
tax under the equity incentive 9,395,040.46 17,943,967.78
Others 5,203,778.87 6,055,212.85
Total 38,362,676.67 76,989,647.10
Explanation of cash received related to other operating activities: None
(2) Cash payments related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Expenses paid 409,369,512.68 316,942,453.60
Current accounts 6,431,125.10 2,335,741.67
Authorized payment of individual income
tax under the equity incentive 10,715,472.44 28,191,169.72
Others 1,126,549.69 10,981,895.83
Total 427,642,659.91 358,451,260.82
Explanation of cash paid related to other operating activities: None
(3) Cash received related to other investing activities
Unit: RMB
C&S Paper Co., Ltd. Semi-annual Report 2021
194
Item Incurred in the current period Incurred in the prior period
Principal repayment on maturity of wealth
management products 50,000,000.00 40,000,000.00
Principal repayment on maturity of
treasury bonds reverse repo 87,105,000.00
Total 50,000,000.00 127,105,000.00
Explanation of cash received related to other investment activities: None
(4) Cash payments related to other investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Purchasing wealth management products 212,400,000.00
Total 212,400,000.00
Explanation of cash paid related to other investment activities: None
(5) Cash received related to other financing activities: None
(6) Cash payments related to other financing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Repurchase and deregistration of equity
incentives 8,752,250.65 3,475,786.26
Share repurchase 532,605,631.91 27,680,721.76
Deposits of security deposits for bills,
letters of guarantee and letters of credit 12,315,870.82 9,290,358.88
Repayment of principal and interests of
lease liabilities under the new lease
standards
1,023,913.33
Total 554,697,666.71 40,446,866.90
Explanation of cash paid related to other financing activities: None
79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: RMB
Supplementary information Amount of the current period Amount of last period
1 Reconciliation of net profit to cash flows
from operating activities: -- --
Net Profit 407,144,647.35 452,699,484.61
Plus: Provisions for asset impairment 1,452,221.18 2,274,081.15
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195
Depreciation of fixed assets, oil
and gas assets and productive biological
assets
163,103,078.23 145,151,634.15
Depreciation of use right assets 2,181,245.94
Intangible asset amortization 3,326,149.16 2,901,377.36
Long-term unamortized expenses 5,792,540.92 3,200,058.79
Losses from disposal of fixed
assets, intangible assets and other long-term
assets (“-” indicates income)
259,896.46 896,870.05
Losses from fixed assets write-off
(“-” indicates income) 627,147.81 18,548.29
Losses from changes in fair value
(“-” indicates income)
Finance expenses (“-” indicates
income) 4,730,497.09 -2,415,195.58
Investment losses (“-” indicates
income) -358,473.15 -2,287,274.87
Decrease in deferred income tax
assets (“-” indicates increase) -17,332,968.85 1,306,113.02
Increase in deferred income tax
liabilities (“-” indicates decrease) 11,200,240.61 7,523,160.15
Decrease in inventories (“-”
indicates increase) 36,965,050.50 -192,512,816.22
Decrease in operating receivables
(“-” indicates increase) 78,196,966.06 -100,988,107.49
Increase in operating payables (“-”
indicates decrease) 40,577,548.88 186,790,654.92
Others
Net cash flows from operating
activities 737,865,788.19 504,558,588.33
2 Significant investment and financing
activities not involving cash: -- --
Conversion of debt to capital
Convertible corporate bonds due within
one year
Fixed assets acquired under finance
lease
3 Net changes in cash and cash equivalents: -- --
Balance of cash at the end of the period 701,224,202.33 896,433,846.64
Less: Balance of cash at the beginning
of the period 1,050,034,135.72 675,996,852.97
Plus: Balance of cash equivalents at the
end of the period
Less: Balance of cash equivalents at the
beginning of the period
Net increase in cash and cash
equivalents -348,809,933.39 220,436,993.67
C&S Paper Co., Ltd. Semi-annual Report 2021
196
(2) Net cash paid to acquire subsidiaries during the period: None
(3) Net cash received from the disposal of subsidiaries during the period: None
(4) Constitution of cash and cash equivalents
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
I. Cash 701,224,202.33 1,050,034,135.72
Including: Cash on hand 56,626.99 36,349.55
Bank deposits always available for
payment 694,226,698.05 1,047,785,634.71
Other monetary funds always
available for payment 6,940,877.29 2,212,151.46
III. Balance of Cash and Cash Equivalents at
the End of the Period 701,224,202.33 1,050,034,135.72
Other description: None
80. Notes to items in the statement of changes in owner’s equity
Description on the name and amount of items under “Others” whose closing balance in last year was adjusted and
other relevant issues: None
81. Assets with restricted right to use or ownership
Unit: RMB
Item Book value at the end of the period Reason for restriction
Other monetary funds 87,477,934.66 Security deposits for issuing letter of credit
and notes
Total 87,477,934.66 --
Other description: None
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Item Balance of foreign currency at
the end of the period Conversion rate
Balance of converted RMB at
the end of the period
Monetary funds -- -- 170,188,998.60
Including: USD 25,368,909.56 6.4704 164,146,992.42
EUR
HKD 7,251,567.67 0.8332 6,042,006.18
C&S Paper Co., Ltd. Semi-annual Report 2021
197
Accounts receivable -- -- 29,765,127.44
Including: USD 1,052.88 6.4704 6,812.55
EUR
HKD 35,715,692.38 0.8332 29,758,314.89
Long-term borrowings -- --
Including: USD
EUR
HKD
Other receivables 1,509,084.28
Including: HKD 1,811,190.93 0.8332 1,509,084.28
Accounts payable 173,342,875.75
Including: USD 26,774,200.70 6.4704 173,239,788.21
EUR 13,400.00 7.6931 103,087.54
Other payables 5,664,414.41
Including: HKD 6,790,466.58 0.8332 5,657,816.75
USD 1,013.42 6.4704 6,557.23
MOP 50.00 0.8086 40.43
Other description: None
(2) For overseas business entities, especially important ones, disclose their main overseas business address,
the standard currency for accounting and selection basis. If there are changes in the standard currency for
accounting, reasons shall be also provided
√ Applicable □ Not applicable
Overseas business entity Business address Standard currency for accounting
Zhong Shun International Co., Ltd. Hong Kong RMB
C&S Hong Kong Co., Ltd. Hong Kong RMB
C&S (Macao) Co., Ltd. Macao RMB
83. Hedges
Disclosure of hedged items and related hedging instruments and qualitative and quantitative information about
hedged risks according to the type of hedging: None
84. Government grants
(1) Basic information on government grants
Unit: RMB
Category Amount Reporting items Amount recognized as profit or
loss for the current period
Related to asset 4,000,000.00 Deferred income
C&S Paper Co., Ltd. Semi-annual Report 2021
198
Related to asset 7,008,167.50 Other income 7,008,167.50
Related to income 3,525,432.81 Other income 3,525,432.81
Related to income 23,000.00 Non-operating income 23,000.00
Total 14,556,600.31 10,556,600.31
(2) Return of government grants
□ Applicable √ Not applicable
Other description:
Please refer to Note VII (51), (67) and (74) for details.
85. Others: None
VIII. Changes in the Consolidated Scope
1. Business combinations of enterprises not under common control
(1) Business combinations of enterprises not under common control in the reporting period: None
(2) Combination costs and goodwill
Method of determining the fair value of combination costs and descriptions of contingent consideration and its
changes: None
Main reasons for the formation of huge goodwill: None
Other description: None
(3) Acquiree’s identifiable assets and liabilities on the acquisition date
Method of determining the fair value of identifiable assets and liabilities: None
Acquiree’s contingent liabilities assumed in a business combination: None
Other description: None
(4) Profit or loss arising from the recalculation based on fair value of equities held before the acquisition
date
Whether there are transactions through which business combination is achieved in stages while control is obtained
within the reporting period
C&S Paper Co., Ltd. Semi-annual Report 2021
199
□ Yes √ No
(5) Descriptions of being unable to determine the consideration or the fair value of acquiree’s identifiable
assets and liabilities on the acquisition date or at the end of the current period of combination
None
(6) Other descriptions
None
2. Business combinations of enterprises under common control
(1) Business combinations of enterprises under common control in the current period: None
(2) Combination costs
Description on contingent consideration and its changes: None
Other description: None
(3) Book value of assets and liabilities of the combined party on the date of combination
Contingent liabilities of the combined party assumed in a business combination: None
Other description: None
3. Reverse purchase
Basic information of transactions, basis for transactions constituting reverse purchase, whether assets and
liabilities retained by listed companies constitute a business and its basis, determination of combination costs,
adjustment of equity amount and calculation when dealing as equity transactions: None
4. Disposal of subsidiaries
Whether there is situation that one disposal of investment in a subsidiary results in a loss of control
□ Yes √ No
Whether there is situation that the disposal of investment in a subsidiary is achieved in stages through multiple
transactions while the control is lost in the reporting period
□ Yes √ No
C&S Paper Co., Ltd. Semi-annual Report 2021
200
5. Changes in the scope of consolidation due to other reasons
Description of changes in the scope of combination due to other reasons (establishment or liquidation of
subsidiaries, etc.) and related situations:
The Company invested and founded C&S (Jiangsu) Paper Co., Ltd. on February 25, 2021, with a registered
capital of RMB200 million. C&S Paper Co., Ltd. holds 100% of its stakes. C&S (Jiangsu) Paper Co., Ltd. was
incorporated into the scope of consolidated statements from February. Currently, C&S (Jiangsu) Paper has started
operating activities.
On May 19, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Yunnan
Jiaqu Trading Co., Ltd. jointly invested and established Yunnan Dolemi Trading Co., Ltd., with a registered
capital of RMB4 million. Dolemi Sanitary Products holds 60% of the shares while Yunnan Jiaqu holds 40% of the
shares. The Company has incorporated Yunnan Dolemi Trading Co., Ltd. into the scope of its consolidated
statements since May 2021. Currently, Yunnan Dolemi has started operating activities.
On May 20, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Luzhou
Longmatan District Jisheng Trading Co., Ltd. jointly invested and established Luzhou Dolemi Sanitary Products
Co., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while
Jisheng Trading holds 40% of the shares. The Company has incorporated Luzhou Dolemi Sanitary Products Co.,
Ltd. into the scope of its consolidated statements since May 2021. Currently, Luzhou Dolemi has started operating
activities.
On June 08, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Sichuan
Zhong’en Liancheng Technology Co., Ltd. jointly invested and established Mianyang Dolemi Sanitary Products
Co., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while
Zhong’en Liancheng holds 40% of the shares. The Company has incorporated Mianyang Dolemi Sanitary
Products Co., Ltd. into the scope of its consolidated statements since May 2021. Currently, Mianyang Dolemi has
no operating activities.
6. Others: None
IX. Equities in Other Entities
1. Equities in subsidiaries
C&S Paper Co., Ltd. Semi-annual Report 2021
201
(1) Composition of the enterprise group
Name of
subsidiary
Main business
address
Registered
address Principal businesses
Shareholding
percentage Obtaining
method Direct Indirect
Jiangmen
Zhongshun Paper
Co., Ltd.
Jiangmen,
Guangdong
Jiangmen,
Guangdong
R&D, production, and sales (including online sales): household paper, maternal and infant products,
cosmetics, wipes, non-woven products, daily necessities, and cleaning supplies; sales (including online
sales) of Class I and II medical devices. (The above items do not involve special management
measures for the access of foreign investment.) (For items that must be approved in accordance with
the law, the company may carry out business operations upon approval by competent departments.)
88.25% 11.75%
Capital
contributio
n for
establishm
ent
Zhejiang
Zhongshun Paper
Co., Ltd.
Jiaxing, Zhejiang Jiaxing, Zhejiang
General items: manufacture of paper products; sales of paper products; sales of paper pulp; sales of
personal hygiene products; sales of hygiene products and disposable medical products; sales of
disinfectants (excluding hazardous chemicals); sales of Class I medical devices; retail of Class I
medical devices; sales of Class II medical devices; retail of class II medical devices; wholesale of
medical face masks; retail of medical face masks; sales of general merchandise; retail of daily
necessities; sales of maternal and infant products; wholesale of kitchenware, sanitary ware and daily
sundries; wholesale of cosmetics; retail of cosmetics; wholesale of needle textiles and raw materials;
sales of needle textiles; sales of chemical industry products (excluding chemical products that need to
be licensed); Internet sales (excluding the sales of commodities requiring a permit) (The company may
carry out business operations independently according to the law based on the business license, except
for items that must be licensed according to the law.) (For items that must be approved in accordance
with the law, the company may carry out business operations upon approval by competent
departments.)
75.00% 25.00%
Capital
contributio
n for
establishm
ent
C&S Hong Kong
Co., Ltd. Hong Kong Hong Kong Purchase of pulp 100.00%
Capital
contributio
n for
establishm
ent
C&S (Yunfu)
Paper Co., Ltd.
Yunfu,
Guangdong
Yunfu,
Guangdong
R&D, production, wholesale, retail and online sales: household paper, sanitary products, maternal and
infant products, daily necessities, cosmetics, medical devices, sanitary materials, non-woven fabrics
and products, polymer materials and products, daily sundries, and disinfectant products (excluding
hazardous chemicals); wholesale, retail and online sales: food; import and export of goods and
technologies (excluding the import and export of goods and technologies prohibited by the State or
involving administrative approval); warehousing services (limited to warehouses qualified in fire
100.00%
Capital
contributio
n for
establishm
ent
C&S Paper Co., Ltd. Semi-annual Report 2021
202
protection without hazardous chemicals). (For items that must be approved in accordance with the law,
the company may carry out business operations upon approval by competent departments.)
Yunfu Hengtai
Trading Co., Ltd.
(note)
Yunfu,
Guangdong
Yunfu,
Guangdong
Wholesale, retain and online sales: paper, wood pulp, sanitary products, maternal and infant products,
cosmetics, daily necessities, medical equipment, daily sundries, disinfection supplies (excluding
dangerous chemicals); import and export of goods or technologies (excluding the import and export of
goods and technologies prohibited by the State or involving administrative approval). (For items that
must be approved in accordance with the law, the company may carry out business operations upon
approval by competent departments.)
100.00%
Capital
contributio
n for
establishm
ent
C&S (Macao)
Co., Ltd. Macao Macao Wholesale, trade 100.00%
Capital
contributio
n for
establishm
ent
Zhongshan
Zhongshun
Trading Co., Ltd.
Zhongshan,
Guangdong
Zhongshan,
Guangdong
Wholesale, retail and online sales (sales only on third-party platforms) of paper supplies, paper
products (excluding printing products), wood pulp, general merchandise, hygiene products, cosmetics,
nonwoven products, chemical products for daily use, Class I medical devices and food; warehousing
(excluding hazardous chemicals and precursor chemicals); import and export of goods and
technologies; operations of Class II and Class III medical devices. (The above business scope involves
food operations, import and export of goods, and import and export of technologies.) (Exclude items
prohibited by laws and administrative regulations; items whose operations are restricted by laws and
administrative regulations shall not be carried out unless the permit has been obtained.) (For items that
must be approved in accordance with the law, the company may carry out business operations upon
approval by competent departments.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
Xiaogan C&S
Trading Co., Ltd. Xiaogan, Hubei Xiaogan, Hubei
Import, export and sales of paper products, general merchandise and pulp boards; sales of cosmetics,
shower gel and sanitary pads; sales of baby products (excluding food). (For items that must be
approved in accordance with the law, the company may carry out business operations upon approval
by competent departments.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
Beijing C&S
Paper Co., Ltd. Beijing Beijing
Sales of paper products, daily necessities, paper pulp, and pulp boards; import and export of goods.
(The company may independently select business items and carry out business activities in accordance
with the law; for items that must be approved in accordance with the law, the company may carry out
business operations upon approval by competent departments based on contents of the approval; it is
prohibited to engage in business activities of items prohibited and restricted by the city’s industrial
policies.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
C&S Paper Co., Ltd. Semi-annual Report 2021
203
control
Chengdu
Zhongshun Paper
Co., Ltd.
Pengzhou,
Sichuan
Pengzhou,
Sichuan
Sales of household paper, cleaning products, general merchandise, hygiene products, baby products,
cosmetics, nonwoven products, feminine hygiene products, chemical products for daily use, daily
necessities, medical devices, medical supplies and disinfectant products (excluding hazardous
chemicals); e-commerce (For items that must be approved in accordance with the law, the company
may carry out business operations upon approval by competent departments.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
Hangzhou Jie
Rou Trading Co.,
Ltd.
Hangzhou,
Zhejiang
Hangzhou,
Zhejiang
Wholesale, retail: paper products, paper pulp, general merchandise; import and export of goods and
technologies (exclude items prohibited by laws and administrative regulations; items whose operations
are restricted by laws and administrative regulations shall not be carried out unless the permit has been
obtained); other legitimate items that do not need approval according to the law) (for items that must
be approved in accordance with the law, the company may carry out business operations upon
approval by competent departments)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
Shanghai
Huicong Paper
Co., Ltd.
Shanghai Shanghai
Household paper, paper pulp, pulp boards, import and export of goods and technologies. (For items
that must be approved in accordance with the law, the company may carry out business operations
upon approval by competent departments.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
C&S (Hubei)
Paper Co., Ltd. Xiaogan, Hubei Xiaogan, Hubei
Licensed items: production of sanitary products and disposable medical supplies; production of
cosmetics (for items that must be approved in accordance with the law, companies may carry out
business operations upon approval by relevant departments, and the specific business items are subject
to the approval document or the permit issued by competent department). General items: sales of
sanitary products and disposable medical supplies; retail of cosmetics; wholesale of cosmetics;
manufacture of paper; sales of personal hygiene products; sales of knitwear; manufacture of maternal
and infant products; sales of maternal and infant products; sales of paper products; manufacture of
paper products; sales of daily necessities; sales of daily chemical products; sales of disinfectants
(excluding hazardous chemicals); Internet sales (excluding the sales of commodities requiring a
permit); sales of Class I medical devices; sales of Class II medical devices; import and export of goods
and technologies (excluding the import and export of goods and technologies prohibited by the State
or involving administrative approval). (For items that must be approved in accordance with the law,
the company may carry out business operations upon approval by competent departments.)
93.375% 6.625%
Business
combinati
ons
involving
enterprises
under
common
control
C&S Paper Co., Ltd. Semi-annual Report 2021
204
Zhong Shun
International Co.,
Ltd.
Hong Kong,
China
Hong Kong,
China Sales of paper products 100.00%
Business
combinati
ons
involving
enterprises
under
common
control
C&S (Sichuan)
Paper Co., Ltd.
Pengzhou,
Sichuan
Pengzhou,
Sichuan
Licensed items: production of sanitary products and disposable medical supplies; import and export of
goods (for items that must be approved in accordance with the law, the company may carry out
business operations upon approval by competent departments, and the specific business items are
subject to the approval document or the permit issued by relevant department). General items: sales of
sanitary products and disposable medical supplies; sales of personal hygiene products; sales of daily
necessities; manufacture of paper products; sales of paper products; manufacture of paper;
manufacture of daily chemical products; sales of daily chemical products; sales of Class II medical
devices; sales of Class I medical devices; manufacture of industrial textile products; sales of industrial
textile products; manufacture of maternal and infant products; sales of maternal and infant products.
(The company may carry out business operations independently according to the law based on the
business license, except for items that must be licensed according to the law.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
C&S
(Zhongshan)
Paper Co., Ltd.
Zhongshan,
Guangdong
Zhongshan,
Guangdong
Production, processing and sales: high-class household paper products (excluding printing process);
import and export of pulp boards (exclude items prohibited by laws and administrative regulations;
items whose operations are restricted by laws and administrative regulations shall not be carried out
unless the permit has been obtained). (For items that must be approved in accordance with the law, the
company may carry out business operations upon approval by competent departments.)
100.00%
Business
combinati
ons
involving
enterprises
under
common
control
C&S (Dazhou)
Paper Co., Ltd. Dazhou, Sichuan Dazhou, Sichuan
R&D, production, processing, and sales (including online sales): household paper, tissue boxes,
hygiene products, cosmetics, non-woven products, plastic products, metalware, rubber products,
ceramics, baby products, feminine hygiene products and daily necessities; bamboo and forest trees
planting; acquisition of raw materials of bamboo and wood for paper making; R&D, production and
sales of bamboo pulp, wood pulp, bamboo chips and wood chips; combined heat and power and sales;
warehouse leasing; processing and sales of lime and limestone; processing of industrial wastewater
and gray water reuse; general import and export business; sales of construction materials, hardware
and electrical products, and chemical products (excluding hazardous products). (For items that must be
approved in accordance with the law, the company may carry out business operations upon approval
by competent departments.)
100.00%
Capital
contributio
n for
establishm
ent
Sun Daily Yunfu, Yunfu, R&D, production, processing, and online sales: paper products, hygiene products, cosmetics, 50.00% 50.00% Capital
C&S Paper Co., Ltd. Semi-annual Report 2021
205
Necessities Co.,
Ltd.
Guangdong Guangdong nonwoven products, plastic products for daily use, chemical products for daily use, metalware for
daily use, rubber products for daily use, and ceramics for daily use; import and export of goods or
technologies (excluding the import and export of goods and technologies prohibited by the State or
involving administrative approval). (For items that must be approved in accordance with the law, the
company may carry out business operations upon approval by competent departments.)
contributio
n for
establishm
ent
Dolemi Sanitary
Products Co.,
Ltd.
Zhongshan,
Guangdong
Zhongshan,
Guangdong
General items: manufacture of paper products; Internet sales (sales only on third-party platforms)
(excluding the sales of commodities requiring a permit); sales of personal hygiene products; sales of
household products, sales of hygiene products and disposable medical products; retail of cosmetics;
sales of general merchandise; sales of plastic products; sales of metal products; sales of rubber
products; manufacture of daily-use ceramic products. (The company may carry out business operations
independently according to the law based on the business license, except for items that must be
licensed according to the law.) (For items that must be approved in accordance with the law, the
company may carry out business operations upon approval by competent departments.)
60.00% 40.00%
Capital
contributio
n for
establishm
ent
Yunnan Dolemi
Trading Co., Ltd.
Kunming,
Yunnan
Kunming,
Yunnan
Sales of hygiene products, household products, cosmetics, daily necessities, plastic products, metal
products, and rubber products; manufacture of ceramic products and paper products (For items that
must be approved in accordance with the law, the company may carry out business operations upon
approval by competent departments.)
60.00%
Capital
contributio
n for
establishm
ent
Luzhou Dolemi
Sanitary Products
Co., Ltd.
Luzhou, Sichuan Luzhou, Sichuan
General items: sales of personal hygiene products; sales of paper products; Internet sales (excluding
the sales of commodities requiring a permit); sales of household products; sales of sanitary products
and disposable medical products; sales of daily necessities; sales of plastic products; sales of metal
products; sales of rubber products; manufacture of daily-use ceramic products (the company may carry
out business operations independently according to the law based on the business license, except for
items that must be licensed according to the law)
60.00%
Capital
contributio
n for
establishm
ent
Mianyang Dolemi
Sanitary Products
Co., Ltd.
Mianyang,
Sichuan
Mianyang,
Sichuan
General items: wholesale of cosmetics; sales of personal hygiene products; manufacture of paper
products; Internet sales (excluding the sales of commodities requiring a permit); sales of household
products; sales of sanitary products and disposable medical products; retail of cosmetics; sales of daily
necessities; sales of plastic products; sales of metal products; sales of rubber products; manufacture of
daily-use ceramic products (the company may carry out business operations independently according
to the law based on the business license, except for items that must be licensed according to the law).
60.00%
Capital
contributio
n for
establishm
ent
C&S (Jiangsu)
Paper Co., Ltd. Suqian, Jiangsu Suqian, Jiangsu
Licensed items: manufacture of Class II medical devices; import and export of goods; import and
export of technologies; manufacture of Class III medical devices; operation of Class III medical
devices (for items that must be approved in accordance with the law, companies may carry out
business operations upon approval by relevant departments, and the specific business items are subject
to approval result). General items: manufacture of paper products; sales of plastic products; sales of
paper products; Internet sales (excluding the sales of commodities requiring a permit); sales of daily
necessities; sales of personal hygiene products; sales of household products; sales of sanitary products
and disposable medical products; retail of cosmetics; wholesale of cosmetics; sales of knitwear;
100.00%
Capital
contributio
n for
establishm
ent
C&S Paper Co., Ltd. Semi-annual Report 2021
206
wholesale of kitchen utensils and daily groceries; sales of metal products; sales of rubber products;
manufacture of daily-sue ceramic products; R&D of kitchen utensils and daily groceries; retail of
kitchen utensils and daily groceries; sewage treatment and recycling; manufacture of Class I medical
devices; sales of Class I medical devices; sales of Class II medical devices; sales of disinfectants
(excluding hazardous chemicals). (The company may carry out business operations independently
according to the law based on the business license, except for items that must be licensed according to
the law)
Description of the difference between the percentage of shares held in a subsidiary and the percentage of voting rights: None
Basis for holding 50% or less than of the voting rights but controlling the investee, or holding 50% or more of the voting rights but not controlling the investee: None
Basis for controlling the important consolidated structured entities: None Basis for determining whether the Company is an agent or a principal: None
Other descriptions: All shares held indirectly belong to the shares held by wholly-owned subsidiaries of the Company.
C&S Paper Co., Ltd. Semi-annual Report 2021
207
(2) Important non-wholly-owned subsidiaries
Description that the percentage of shares held by minority shareholders in a subsidiary is different from the
percentage of their voting rights: None
Other description: The Company does not have important non-wholly-owned subsidiaries.
(3) Main financial information of important non-wholly-owned subsidiaries: None
(4) Significant restrictions on the use of the assets and the repayment of the debts of the enterprise group:
None
(5) Financial or other support provided to consolidated structured entities: None
Other description:
Note: C&S (Yunfu) Co., Ltd. was changed to Yunfu Hengtai Trading Co., Ltd. in March 2021.
2. Transactions in which the share of owner’s equity in a subsidiary changes while control of the subsidiary
is still retained
(1) Description of changes in the share of owner’s equity in the subsidiary: None
(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to owners
of the Parent Company
Other description: There are no transactions of the Company in which the share of owner’s equity in a subsidiary
changes and control of the subsidiary is retained.
3. Interests in joint arrangements or associates
(1) Important joint ventures or associates
Description that the percentage of shares in joint ventures or associates is different from the percentage of voting
rights: None
Basis for holding less than 20% of the voting rights but with significant influence, or holding 20% or more of the
voting rights but without significant influence: None
C&S Paper Co., Ltd. Semi-annual Report 2021
208
(2) Main financial information of important joint ventures: None
(3) Main financial information of important associates: None
(4) Summary financial information of unimportant joint ventures and associates: None
(5) Description of significant restrictions on the ability of joint ventures or associates to transfer funds to
the Company: None
(6) Excess losses incurred by joint ventures or associates: None
(7) Unconfirmed commitments related to the investment in joint ventures: None
(8) Contingent liabilities related to the investment in joint ventures or associates: None
4. Important joint operation
The Company does not have important joint operations.
5. Interests in unconsolidated structured entities
Description of unconsolidated structured entities:
The Company does not have interests in unconsolidated structured entities.
6. Others: None
X. Risks Associated with Financial Instruments
The main financial instruments of the Company include monetary funds, notes receivable, accounts receivable,
notes payable, accounts payable, other payables, loans, etc. Please refer to relevant items of “Note VII” for
detailed information of all financial instruments. The risks associated with these financial instruments and the risk
management policies adopted by the Company to reduce these risks are as follows. The management of the
Company manages and monitors these risk exposures to ensure that the above risks are kept within control.
The Company adopts the sensitivity analysis method to analyze the possible impact of reasonable and possible
changes in risk variables on the profit and loss or shareholder equities in the current period. Since any risk
variable rarely changes in isolation and the correlation between the variables will have a significant effect on the
ultimate financial impact of changes in a certain risk variable, the following contents are under the consumption
that changes of a variable are independent.
C&S Paper Co., Ltd. Semi-annual Report 2021
209
The goal of the Company’s risk management is to strike a proper balance between risks and gains and to minimize
the negative impact of risks on the business performance of the Company while maximizing the interests of
shareholders and other equity investors. Based on this risk management goal, the basic strategy of the Company’s
risk management is to determine and analyze all kinds of risks faced by the Company, clarify the minimum of risk
acceptance and conduct risk management, and monitor risks of all kinds in a timely and reliable manner to control
risks within the limits.
1. Credit risk
Credit risk refers to the risk of financial losses of one party caused by the failure of the other party to perform its
obligations. As of June 30, 2021, the largest credit exposure that may cause financial losses to the Company
mainly comes from the losses of the Company’s financial assets due to failure of the other contractual party to
perform its obligations.
In order to reduce credit risk, the Company only conducts transactions with recognized customers with good
credit status, and continuously monitors the accounts receivable through credit monitoring of existing customers
and aging analysis to ensure that the Company does not face the risk of bad debts and keep the overall credit risk
within control.
Liquid funds of the Company are deposited in banks with high credit ratings, so the credit risk of liquid funds is
low.
2. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments due
to changes in market interest rates. The interest rate risk faced by the Company mainly comes from bank
borrowings (please refer to “Note VII (32), (43) and (45)” for details). By developing a good relationship with
banks and carrying out proper design of credit lines, types of credits, and credit terms, the Company ensures
sufficient bank credit lines to meet its various financing needs. The risk of interest rate fluctuation can be
reasonably reduced by shortening the term of a single loan and specially stipulating early prepayment terms.
3. Foreign exchange risk
Foreign exchange risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments
due to changes in foreign exchange rates. The Company tries its best to match foreign currency income with
foreign currency expenditure to reduce foreign exchange risks.
Foreign exchange risks borne by the Company are mainly related to USD and HKD. Except for purchasing and
selling in USD and HKD by its overseas subsidiaries, other major business activities of the Company are priced
C&S Paper Co., Ltd. Semi-annual Report 2021
210
and settled in RMB. See “Note VII (82)” for the conversion of foreign currency financial assets and liabilities into
RMB as of June 30, 2021. During the reporting period, the Company generated exchange profit and loss of
RMB1,346,250.22.
Sensitivity analysis of foreign exchange risk:
Analysis assumption: On the basis that all other variables remain constant on the balance sheet date, the possible,
reasonable changes of foreign exchange rate will have the following pre-tax effects on the Company’s profit and
loss and shareholders’ equity in the current period:
Unit: RMB
Item Current period
Impact on profit Impact on shareholders’ equity
Depreciation of RMB against foreign currency by 1.00% -214073.94 -214073.94
Appreciation of RMB against foreign currency by 1.00% 214073.94 214073.94
4. Liquidity risk
Liquidity risk refers to the risk of capital shortage when an enterprise fulfills its obligation to settle accounts by
delivering cash or other financial assets. The Company’s policy is to ensure that it has sufficient cash to repay
mature debts. Liquidity risk is centrally controlled by the financial departments of the Company. The financial
departments monitor cash balances, negotiable securities that can be cashed in at any time, and carry out rolling
forecasts on cash flows in the next six months to ensure that the Company has sufficient funds to repay debts
under all reasonable forecasts.
Financial liabilities held by the Company as of June 30, 2021 analyzed based on the maturity period of
undiscounted remaining contractual obligations are as follows:
Unit: RMB
Item Within 1 year Over 1 year Total
Notes payable
289,707,176.43 289,707,176.43
Accounts payable
711,941,179.23
11,091,908.16 723,033,087.39
Other payables
784,298,181.50
12,092,818.95 796,391,000.45
Total
1,785,946,537.16
23,184,727.11 1,809,131,264.27
C&S Paper Co., Ltd. Semi-annual Report 2021
211
XI. Disclosure of Fair Value
1. Fair value of assets and liabilities measured at fair value at the end of the reporting period: None
2. Basis for determining the market price of recurring and non-recurring fair value measurement items in
Level 1: None
3. Qualitative and quantitative information on important parameters and valuation techniques used for
recurring and non-recurring fair value measurement items in Level 2: None
4. Qualitative and quantitative information on important parameters and valuation techniques used for
recurring and non-recurring fair value measurement items in Level 3: None
5. Adjustment information and sensitivity analysis of unobservable parameters between the opening and
closing book values of recurring fair value measurement items of Level 3: None
6. For recurring fair value measurement items with transfer between different levels, reasons for such
transfer and policies for determining the time of conversion: None
7. Changes in valuation techniques within the reporting period and reasons for such changes: None
8. Fair value of financial assets and financial liabilities not measured at fair value: None
9. Others: None
XII. Related Parties and Related Party Transactions
1. Information on the Parent Company of the Company
Name of Parent
Company Registered address Principal businesses Registered capital
Shareholding
percentage of the
Parent Company to
the Company
Percentage of voting
right of the Parent
Company to the
Company
Guangdong
Zhongshun Paper
Group Co., Ltd.
Zhongshan,
Guangdong
External investment;
consulting of
information on
commodities
circulation
(exclusive of real
estate, labor
services, financial
futures, and studying
abroad)
RMB30 million 28.63% 28.63%
Information on the Company’s Parent Company
The ultimate controller of the Company is Mr. Deng Yingzhong, the father, and Mr. Deng Guanbiao and Mr. Deng
C&S Paper Co., Ltd. Semi-annual Report 2021
212
Guanjie, whose two sons.
Other description: None
2. Information on subsidiaries of the Company
See Note IX Equities in Other Entities for detailed information on the subsidiaries of the Company.
3. Information on the joint ventures and associates of the Company
For important joint ventures or associates, please refer to the notes for details.
Other description: The Company does not have interests in joint venture arrangements or associates.
4. Information on other related parties
Name of other related parties Relationship between other related parties and the Company
Chung Shun Co. The second-largest shareholder of the Company, with 20.31% of the
Company’s shares
Guangzhou Zhongshun Trade Co., Ltd. A company controlled by the nephew and the husband of the niece
of Mr. Deng Yingzhong, director of the Company
Bama Zhongshun Health Products Co., Ltd. A company controlled by Guangdong Zhongshun Paper Group Co.,
Ltd., the Company’s controlling shareholder
Yantai Zhongshun Network Technology Co., Ltd. The partially-owned subsidiary of Bama Zhongshun Health
Products Co., Ltd. controlled by the Company’s controlling shareholders
Shenzhen Zhongshun Caizhi Investment Co., Ltd.
Formerly known as Zhongshun Industrial Investment (Shenzhen)
Co., Ltd., a company controlled by the Company’s actually
controllers, i.e. Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie
Pengzhou Lexiangshenghuo Trading Co., Ltd. A company where the senior manager Yue Yong’s son holds shares and serves as a supervisor
Sichuan West Lexiangshenghuo Trading Co., Ltd. A company where the senior manager Yue Yong’s son holds shares
and serves as a supervisor
Chongqing Qinyue Trading Co., Ltd. A company where the senior manager Yue Yong’s brother holds
shares and serves as a supervisor
Other description: The Company’s directors, supervisors, senior managers and their close family members are
related parties of the company.
5. Information on related party transactions
(1) Related party transactions for purchase and sale of goods, and provision and acceptance of labor
services: None
Table of sale of goods/provision of labor services
Unit: RMB
Related party Content of related party Incurred in the current period Incurred in the prior period
C&S Paper Co., Ltd. Semi-annual Report 2021
213
transactions
Pengzhou Lexiangshenghuo
Trading Co., Ltd. Sale of goods 796,449.56 828,658.05
Sichuan West Lexiangshenghuo
Trading Co., Ltd. Sale of goods 289,094.73 180,809.75
Chongqing Qinyue Trading Co.,
Ltd. Sale of goods 247,979.83
Guangdong Zhongshun Paper
Group Co., Ltd. Sale of goods 56,637.17
Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of labor
services: None
(2) Related entrusted management/contracting and entrusting management/contracting out: None
(3) Related lease
The Company as the lessee: None
The Company as the lessee:
Unit: RMB
Name of lessor Type of leased assets Lease fee confirmed in the
current period Lease fee confirmed in the last
period
Mr. Deng Yingzhong, Mr. Deng
Guanbiao and Mr. Deng
Guanjie
Housing lease 1,459,590.68 1,474,047.18
Explanation of related lease: None
(4) Related guarantee: None
(5) Interbank borrowing between related parties: None
(6) Asset transfer and debt reorganization between related parties: None
(7) Remuneration for key managers
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Remuneration for key managers 11,500,854.16 8,140,753.70
C&S Paper Co., Ltd. Semi-annual Report 2021
214
(8) Other related party transactions: None
6. Receivables from and payables to related parties
(1) Receivables
Unit: RMB
Item Related party
Balance at the end of the period Balance at the beginning of the period
Book balance Impairment
provision Book balance
Impairment
provision
Accounts receivable Chongqing Qinyue
Trading Co., Ltd. 60,876.03 3,043.80
Other receivables Chongqing Qinyue
Trading Co., Ltd. 44.63 2.23
(2) Payables
Unit: RMB
Item Related party Book balance at the end of the
period
Book balance at the beginning
of the period
Contract liabilities Sichuan West Lexiangshenghuo
Trading Co., Ltd. 23,518.90 195.90
Contract liabilities Pengzhou Lexiangshenghuo
Trading Co., Ltd. 13.67 1.67
Other payables Chongqing Qinyue Trading Co.,
Ltd. 0.77
7. Commitments of related parties: None
8. Others
XIII. Share-based Payment
1. Overall information on share-based payment
√ Applicable □ Not applicable
Unit: RMB
The Company’s total amount of all equity instruments granted in the
current period 0.00
The Company’s total amount of all equity instruments exercised in the
current period 6,387,244.00
The Company’s total amount of all equity instruments expired in the
current period 3,315,396.00
Scope of exercise prices and remaining contractual term of the Company’
stock options issued as at the end of the reporting period
The exercise price in the first exercise period for stock
options awarded by the Company in the first grant
period as at the end of reporting period is
RMB8.572/share, the exercise price in the first exercise
period for reserved stock options is RMB13.965/share,
C&S Paper Co., Ltd. Semi-annual Report 2021
215
and the exercise price in the second exercise period for
first-grant stock options is RMB8.472/share. The
validity period is from the grant date of the stock
options to the date when all stock options are exercised or canceled, with a maximum period of 60 months.
Other description: None
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Method of determining the fair value of equity instruments at the
grant date
1. Restricted shares: the stock closing prices at the grant date
2. Stock options: Black-Scholes model for option pricing
3. Employee stock ownership plan: the stock closing prices at
the grant date
Basis for determining the number of vested equity instruments Upon approval of the general meeting of shareholders
Reasons for significant differences between current estimates and
previous estimates None
Cumulative amount of equity-settled share-based payments
recognized as capital surplus 171,552,833.56
Total fees confirmed by the equity-settled share-based payment in
the current period 12,167,835.66
Other description: None
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Revision and termination of share-based payment
There was no revision and termination of share-based payment of the Company during the reporting period.
5. Others: None
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
As at June 30, 2021, the Company had no significant commitments that should have been disclosed but are not
disclosed.
C&S Paper Co., Ltd. Semi-annual Report 2021
216
2. Contingencies
(1) Significant contingent matters on the balance sheet date
As at June 30, 2021, the Company had no significant contingent matters that should have been disclosed but are
not disclosed.
(2) Explanations are also necessary if the Company has no significant contingent matters to be disclosed
There are no significant contingent matters to be disclosed in the Company.
3. Others: None
XV. Events after Balance Sheet Date
1. Significant non-adjusting events: None
2. Profit distribution: None
3. Sales return: None
4. Explanation on other events after the balance sheet date: None
XVI. Other Significant Matters
1. Corrections to previous accounting errors
(1) Retroactive restatement approach: None
(2) Prospective approach: None
2. Debt restructuring: None
C&S Paper Co., Ltd. Semi-annual Report 2021
217
3. Assets replacing
(1) Exchange of non-monetary assets: None
(2) Other asset replacing: None
4. Annuities plan: None
5. Operation discontinuation: None
6. Segment information
(1) Determination basis and accounting policies of reporting segments
The Company does not have operating segments with different economic features and hence has not identified
operating segments according to internal organization structure, management requirements and internal reporting
policies. Therefore, there was no information on reporting segments based on operating segments to be disclosed.
(2) Financial information on reporting segments: None
(3) Explanation on reasons if the Company has no reporting segments or is unable to disclose the total
assets and liabilities of the reporting segments: None
(4) Other description: None
7. Other important transactions and matters that may affect the decisions of investors: None
8. Others
In 2020, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China Limited
Zhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2020-XYDXY-33725001), under which
the bank offers a credit line of XIAOYIDA service up to RMB130 million to Shanghai Junmeng and the Company
provides a joint and several liability guarantee. The line of credit is valid until June 4, 2021 and the financing
period does not exceed 90 days. As of June 30, 2021, Shanghai Junmeng had a financing balance of the
XIAOYIDA service at RMB44.8 million.
In 2020, Zhongshan Zhongshun Trading Co., Ltd., a subsidiary of the Company, signed the XIAOYIDA Business
Cooperation Agreement with Bank of China Limited Zhongshan Branch and Wuhan Jie Rou E-commerce Co.,
Ltd. (No. 2020-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up to
RMB80 million to Wuhan Jie Rou and the Company provides a joint and several liability guarantee. The line of
C&S Paper Co., Ltd. Semi-annual Report 2021
218
credit is valid until June 4, 2021 and the financing period does not exceed 90 days. As of June 30, 2021, Wuhan
Jie Rou had a financing balance of the XIAOYIDA service at RMB46.1 million.
XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Type
Balance at the end of the year Balance at the beginning of the year
Book balance Impairment
provision Book
value
Book balance Impairment
provision Book value
Amount Percenta
ge Amount
Provision
ratio Amount
Percentag
e Amount
Provision
ratio
Including:
Accounts receivable
for which bad debt
reserve is set aside in
portfolios
182,140,
196.12 100.00%
1,765,30
9.60 0.97%
180,374,8
86.52
94,047,36
5.99 100.00%
1,399,993
.66 1.49%
92,647,372.
33
Including:
Portfolio based on
aging
69,802,7
98.34 38.32%
1,765,30
9.60 2.53%
68,037,48
8.74
56,099,68
1.03 59.65%
1,399,993
.66 2.50%
54,699,687.
37
Portfolio based on
related parties
112,337,
397.78 61.68%
112,337,3
97.78
37,947,68
4.96 40.35%
37,947,684.
96
Total 182,140,
196.12 100.00%
1,765,30
9.60 0.97%
180,374,8
86.52
94,047,36
5.99 100.00%
1,399,993
.66 1.49%
92,647,372.
33
Bad debt reserve set aside individually: None
Bad debt reserve set aside individually: None
Bad debt reserve set aside individually: None
Bad debt reserve set aside in portfolios: 1,765,309.60
Unit: RMB
Name Balance at the end of the period
Book balance Impairment provision Ratio of provision
Within the credit period 58,724,778.36 1,174,495.57 2.00%
Credit period - 1 year 10,925,833.41 546,291.67 5.00%
Subtotal of those within 1 year 69,650,611.77 1,720,787.24 2.47%
1 to 2 years 7,557.36 1,133.60 15.00%
2 to 3 years 144,629.21 43,388.76 30.00%
3 to 5 years 50.00%
Over 5 years 100.00%
C&S Paper Co., Ltd. Semi-annual Report 2021
219
Total 69,802,798.34 1,765,309.60 --
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio: None
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio: None
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,
please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 181,988,009.55
1 to 2 years 7,557.36
2 to 3 years 144,629.21
Total 182,140,196.12
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Type
Balance at the
beginning of the
period
Amount of change in the reporting period Balance at the
end of the period Provision Recovery or
reversal Write-off Others
Accounts
receivable 1,399,993.66 365,315.94 1,765,309.60
Total 1,399,993.66 365,315.94 1,765,309.60
Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None
(3) Accounts receivable actually written off in the reporting period: None
Description of write-offs of important accounts receivable: None
C&S Paper Co., Ltd. Semi-annual Report 2021
220
Description on the write-offs of accounts receivables:
The Company did not have written-off accounts receivable in the reporting period.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Name of institution Balance of accounts receivable
at the end of the period
Percentage in total balance of
accounts receivable at the end
of the period
Balance for bad debt reserve at
the end of the period
1st 112,301,902.68 61.66%
2nd 12,935,492.71 7.10% 258,709.85
3rd 10,164,016.37 5.58% 305,546.90
4th 7,919,065.93 4.35% 220,220.10
5th 7,534,401.58 4.14%
Total 150,854,879.27 82.83%
(5) Accounts receivable derecognized due to transfer of financial assets
The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the
reporting period.
(6) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts
receivable
The Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement of
accounts receivable as at the end of the reporting period.
Other description: None
2. Other receivables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Other receivables 114,345,050.47 136,987,584.64
Total 114,345,050.47 136,987,584.64
C&S Paper Co., Ltd. Semi-annual Report 2021
221
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable: None
2) Significant dividends receivable exceeding one year: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
Other description: None
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Nature Book balance at the end of the period Book balance at the beginning of the
period
Margins and deposits 261,812.00 113,606.00
Current accounts 103,687,258.75 131,125,900.41
Reserve 950,342.06 639,681.19
Others 10,040,119.85 5,494,420.94
Total 114,939,532.66 137,373,608.54
2) Provision of bad debt reserve
Unit: RMB
Bad debt provision
Phase I Phase II Phase III
Total Expected credit loss
in the next 12 months
Expected credit losses in
the whole duration (without
credit impairment)
Expected credit losses in
the whole duration (with
credit impairment)
Balance as at January 1,
2021 386,023.90 386,023.90
Balance as at January 1, —— —— —— ——
C&S Paper Co., Ltd. Semi-annual Report 2021
222
2021 in the reporting
period
Provision in the reporting
period 208,458.29 208,458.29
Balance as at June 30,
2021 594,482.19 594,482.19
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 114,903,178.61
1 to 2 years 28,000.00
Over 3 years 8,354.05
4 to 5 years 8,354.05
Total 114,939,532.66
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Type
Balance at the
beginning of the
period
Amount of change in the reporting period Balance at the
end of the period Provision Recovery or
reversal Write-off Others
Other receivables 386,023.90 208,458.29 594,482.19
Total 386,023.90 208,458.29 594,482.19
The Company did not have other receivables that were not written off in the reporting period.
Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
4) Other receivables actually written off in the reporting period: None
Description of write-offs of important other receivables: None
Description on the write-offs of other receivables: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Name of institution Nature of the
amount
Balance at the end
of the period Aging
Percentage in total
balance of other
receivables at the end
Balance of bad debt
reserve at the end of
C&S Paper Co., Ltd. Semi-annual Report 2021
223
of the period the period
1st Current accounts 103,243,400.98 Within 1 year 89.82%
2nd Current accounts 9,460,860.30 Within 1 year 8.23% 473,043.02
3rd Current accounts 163,112.43 Within 1 year 0.14% 8,155.62
4th Current accounts 88,661.21 Within 1 year 0.08%
5th Current accounts 50,000.00 Within 1 year 0.04% 2,500.00
Total -- 113,006,034.92 -- 98.31% 483,698.64
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other
receivables: None
3. Long-term equity investment
Unit: RMB
Item
Balance at the end of the period Balance at the beginning of the period
Book balance Impairment
provision Book value Book balance
Impairment
provision Book value
Investment in
subsidiaries 1,939,122,205.28 1,939,122,205.28 1,928,113,219.50 1,928,113,219.50
Total 1,939,122,205.28 1,939,122,205.28 1,928,113,219.50 1,928,113,219.50
(1) Investment in subsidiaries
Unit: RMB
Investee
Opening
balance (book
value)
Increase/decrease in the period Closing balance
(book value)
Closing balance
of impairment
provision Increase in
investment
Decrease in
investment
Impairment
Provision Others
Zhongshan
Zhongshun
Trading Co.,
Ltd.
94,817,296.68 1,159,775.82 95,977,072.50
C&S (Sichuan)
Paper Co., Ltd.
173,385,439.9
8 1,761,963.00 175,147,402.98
Zhejiang
Zhongshun
Paper Co., Ltd.
56,524,520.15 802,495.02 57,327,015.17
C&S
(Zhongshan)
Paper Co., Ltd.
12,683,100.00 12,683,100.00
Jiangmen
Zhongshun
Paper Co., Ltd.
698,614,821.4
7 340,178.52 698,954,999.99
C&S Paper Co., Ltd. Semi-annual Report 2021
224
C&S (Hubei)
Paper Co., Ltd.
196,016,245.1
3 951,367.92 196,967,613.05
C&S (Yunfu)
Paper Co., Ltd.
657,837,465.4
2 791,191.08 658,628,656.50
Yunfu Hengtai
Trading Co.,
Ltd.
30,200,274.51 30,200,274.51
Chengdu
Zhongshun
Paper Co., Ltd.
627,524.58 21,634.32 649,158.90
Xiaogan C&S
Trading Co.,
Ltd.
311,467.66 119,344.02 430,811.68
Huicong Paper
Co., Ltd. 5,926.18 1,086.90 7,013.08
Hangzhou Jie
Rou Trading
Co., Ltd.
104,095.00 11,326.26 115,421.26
Zhong Shun
International
Co., Ltd.
785,042.74 48,622.92 833,665.66
Sun Daily
Necessities Co.,
Ltd.
200,000.00 200,000.00
C&S (Dazhou)
Paper Co., Ltd. 6,000,000.00 6,000,000.00
C&S (Jiangsu)
Paper Co., Ltd. 5,000,000.00 5,000,000.00
Total 1,928,113,219.
50 5,000,000.00 6,008,985.78
1,939,122,205.
28
(2) Investment in associates and joint ventures: None
(3) Other description: None
4. Operating income and operating cost
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Income Cost Income Cost
Principal business 506,782,115.67 414,158,999.43 493,288,414.96 377,715,003.73
Other businesses 409,284,226.79 374,640,370.60 360,602,849.07 334,899,974.01
Total 916,066,342.46 788,799,370.03 853,891,264.03 712,614,977.74
Information related to income:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 916,066,342.46 916,066,342.46
C&S Paper Co., Ltd. Semi-annual Report 2021
225
Household paper 502,779,375.26 502,779,375.26
Personal care 4,002,740.41 4,002,740.41
Others 409,284,226.79 409,284,226.79
By operating region 916,066,342.46 916,066,342.46
Domestic 916,066,342.46 916,066,342.46
Total 916,066,342.46 916,066,342.46
Information related to performance obligation: None
Information related to the transaction price apportioned to the remaining performance obligation:
The amount of income corresponding to the obligations of contract performance with an executed contract that is
not performed or fully performed at the end of the reporting period is RMB1,063,051.14, of which the income of
RMB1,063,051.14 is expected to be confirmed as income in the year of 2021.
Other description: None
5. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Income from long-term equity-based
investment accounted for using the cost
method
482,375,000.00 140,000,000.00
Others 329,072.79 2,109,515.77
Total 482,704,072.79 142,109,515.77
6. Others: None
XVIII. Supplementary Information
1. List of non-recurring profits and losses of the reporting period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profits/losses from the disposal of non-
current asset -887,044.27
Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national
standards, which are closely relevant to the
company’s business)
10,556,600.31
Profits/losses from assets entrusted to others
for investment or management 358,473.15
Returns on principal-protected wealth
management products at maturity and
C&S Paper Co., Ltd. Semi-annual Report 2021
226
reverse repo of treasury bonds
Other non-operating income and expenses
except for the aforementioned items -187,907.30
Less: Influence of income tax 1,667,039.43
Total 8,173,082.46 --
Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.
1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—
Non-recurring Profit and Loss as recurring profit and loss items.
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
Profit in the reporting period Weighted average return on net assets
Earnings per share
Basic earnings per share
(RMB/share)
Diluted earnings per
share (RMB/share)
Net profit attributable to the
ordinary shareholders of the
Company
7.98% 0.3140 0.3109
Net profit attributable to the
ordinary shareholders of the
Company after excluding non-
recurring profit and loss
7.82% 0.3077 0.3046
3. Difference in accounting data under domestic and international accounting standards
(1) Net profit and net asset differences under International Financial Reporting Standards (IFRS) and
Chinese Accounting Standards (CAS)
□ Applicable √ Not applicable
(2) Net profit and net asset differences under foreign accounting standards and Chinese Accounting
Standards (CAS)
□ Applicable √ Not applicable
(3) Explanation of reasons for the differences between accounting data disclosed under domestic and
overseas accounting standards. If differences are adjusted based on data audited by overseas audit
institutions, the name of the institution should be noted.
4. Others
If there are any ambiguities, the Chinese version shall prevail.
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